Menlo’s Itching Drug Racks Up Two More Trial Failures, Program Ends

Xconomy New York — 

An itching drug that was a key part of the merger of Menlo Therapeutics and Foamix Pharmaceuticals has failed two late-stage studies, leading to a halt on further development of the compound.

The Menlo (NASDAQ: MNLO) drug, serlopitant, was being tested in two Phase 3 clinical trials as a treatment for the itching associated with prurigo nodularis (PN), a skin disorder that causes hard itchy lumps on the skin. The Bridgewater, NJ-based company reported Monday that patients treated with its once-daily pill showed an improvement according to a scale used to assess itching, but not enough to show that the change was statistically significant.

Menlo had also advanced serlopitant into mid-stage testing in psoriasis, but that work is set to wind down. Based on the Phase 3 failure in PN, the company will no longer put any more resources into the drug, CEO David Domzalski said during a conference call with analysts.

The company that is Menlo today was formed by the merger early last month of Israel-based Foamix and Redwood City, CA-based Menlo Therapeutics. The combined company took the Menlo name. Serlopitant was the lead drug candidate of the original Menlo Therapeutics. It had licensed the compound from Merck (NYSE: MRK) in 2012. The small molecule was designed to block neurokinin 1 receptor, a nerve signaling pathway for itching.

Serlopitant’s PN failure comes six weeks it failed a Phase 2 test in pruritus, or itching, of unknown origin. The drug has racked up a string of disappointing clinical trial results, failing also in mid-stage tests for itching associated with atopic dermatitis and for chronic cough.

The merger agreement contemplated a possible PN clinical trial failure. The stock transaction, which resulted in a company majority owned by legacy Foamix shareholders, also includes additional shares contingent on the Phase 3 results. The failure of the Menlo drug in both PN studies means that legacy Foamix shareholders are getting more shares, upping their stake in the combined company to 82 percent. If the drug had succeeded in just one of the Phase 3 tests, those shareholders would have owned 76 percent of the combined company.

The combination of Foamix and Menlo was intended to form a dermatology-focused company with better financial resources. Domzalski contends that the rationale for the merger remains intact. The combined company has a stronger balance sheet than either of its legacy companies had independently, he said on the conference call. Menlo will use those resources to support commercialization of minocycline (Amzeeq), an antibiotic for inflammatory lesions in patients who have moderate-to-severe acne. Foamix launched the topical drug in January. Menlo is also preparing for potential commercialization of FMX103, a minocycline foam developed as a treatment for rosacea. An FDA decision is expected in June. Domzalski said that Menlo has enough cash to carry it until the second quarter of next year.

Image: iStock/Talaj