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Circassia slumps as cat allergy vaccine fails late-stage trial

Has suspended several trials after an “unprecedented” placebo effect derailed leading drug candidate

Circassia PharmaceuticalsUK biotech Circassia Pharma has suffered a major blow as its lead cat allergy treatment Cat-SPIRE failed to show a benefit over placebo in a phase III trial.

The Oxford-based company said that both the immunotherapy and placebo groups in the trial reported improvements in symptoms and reduced use of rescue medications such as antihistamines.

There was however no significant difference between the two groups because of what chief executive Steve Harris described as a "huge and unprecedented" placebo effect. There was a remarkable improvement in symptoms for both Cat-SPIRE and placebo patients.

Shares in the firm lost around two thirds of their value yesterday on the news, which raises questions about its entire allergy treatment pipeline, but had started to regain some ground this morning.

While it analyses the data to try to understand the high placebo effect, Circassia has decided to cut costs by halting recruitment into trials of its grass allergy candidate and suspend plans for a ragweed allergy study. A phase II trial of a birch allergy product will continue as it is close to completion, but a decision on phase IIb house mite trial - also well advanced - has not yet been made.

The development is clearly a blow for Circassia, which has been a darling of the UK biopharma sector since achieving a record initial public offering (IPO) on the London Stock Exchange in 2014, raising £200m.

The company will take some comfort from the fact that it has products already on the market - namely its NIOX airway inflammation monitors - as well as a pipeline of generic respiratory drugs and novel combinations gained through its acquisitions of Aerocrine and Prosonix last year.

NIOX could become a $100m product in the US alone, according to Circassia, which said it would also be looking for additional products to license, which could be promoted via its salesforce.

The company bagged its first respiratory approval last December for a generic of GlaxoSmithKline's Flixotide (fluticasone) - which it has licensed to Mylan - and has a generic of GlaxoSmithKline's blockbuster respiratory drug Seretide (salmeterol and fluticasone) in late-stage development.

It was sitting on cash reserves of almost £140m at the end of May.

Article by
Phil Taylor

21st June 2016

From: Research

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