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Arbutus hit hard as new hep B drug fails on safety

Shares have fallen sharply since company reported results


Shares in Arbutus have fallen sharply after the company reported that its hepatitis B virus (HBV) drug AB-506 has been abandoned.

The Canadian biotech said the decision to stop development of the oral capsid inhibitor was taken on the back of clinical data from a phase 1a/1b study, and in particular two cases of acute hepatitis seen in healthy volunteers that thankfully have now resolved.

Arbutus shares fell around 25% after the news was announced, despite the company’s protestations that it has other compounds coming through its development pipeline.

The scale of the fall-off reflects the pent-up need for more effective treatments for chronic HBV infections, but also that this is only the latest candidate from Arbutus to run into trouble in the past 12 months.

Last December, the company reported disappointing results in a phase 2 trial of a RNA interference candidate called ARB-1467, handing a competitive advantage to Arrowhead Pharmaceuticals whose rival drug ARO-HBV attracted a $175m upfront licensing deal from Johnson & Johnson last year.

It has since abandoned the programme in favour of follow-up RNAi drug AB-729, while another candidate – RNA destabiliser AB-452 – has been delayed by safety concerns. A combination study of AB-506 and AB-729 was due to start next year but now won’t go ahead.

HBV affects an estimated 350 million people worldwide, according to the US Centers for Disease Control and Prevention (CDC).

While oral drugs to treat HBV are available such as Gilead’s Viread (tenofovir), there is still no curative treatment and – while most people are able to shake off the infection in time – a fairly sizeable minority develops chronic HBV that resists drug treatment and can lead to cirrhosis and liver cancer.

With chronic hepatitis C virus (HCV) infections now conquerable using new directly-acting antivirals like Gilead’s Harvoni (sofosbuvir/ledipasvir), the race is on to achieve the same with HBV. Analysts have suggested the market for an HBV cure could be similar in size to that for HCV, which peaked at well over $10bn a year.

The HCV category has started to contract, a victim of its own success as the number of eligible patients has declined, but William Blair has previously suggested the scale of HBV means it could represent a $200bn market over two decades.

Arbutus’ other candidates in development for HBV include follow-on oral capsid inhibitors that have different chemical structures, so may avoid the toxicity that undermined AB-506. It says it plans to select one of several leads to take into clinical trials in next few months.

Article by
Phil Taylor

4th October 2019

From: Research



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