It’s been a tough run for Regulus Therapeutics, and things haven’t gotten any better this morning. Regulus is scrapping two programs, and AstraZeneca has kicked back a third drug to boot, sending Regulus shares down to their lowest levels ever.
San Diego, CA-based Regulus (NASDAQ: RGLS) said this morning that it will stop development of its most advanced treatment, RG-101, a microRNA treatment for hepatitis C, as well as preclinical drug, RGLS5040, for cholestatic liver disease. What’s more, British drugmaker AstraZeneca will terminate development of a drug, RG-125, for the liver disease nonalcoholic steatohepatitis, that it had licensed from Regulus as part of a 2012 collaboration. RG-125 began early-stage testing last year.
As a result of the moves, Regulus now only has one drug left in human clinical testing. That drug, RG-012, for Alport Syndrome, is currently in Phase 2 testing with results expected in mid-2018. Shares of Regulus fell more than 35 percent, to just $0.92 apiece, Monday morning.
“We are squarely focused on taking the steps necessary to advance our pipeline and continue building shareholder value. To that end, we recognize that we must be disciplined in our investment choices and focus our resources and capital on our most promising discovery and development programs, including the application of important development, regulatory and commercial considerations,” said CEO Jay Hagan, in a statement.
The news is the latest setback for Regulus, which was formed in September 2007 as a joint venture between Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY) and Carlsbad, CA-based Ionis Pharmaceuticals (NASDAQ: IONS) and went public in 2012 at $4 per share. The company is developing drugs that block certain microRNAs, small strands of RNA that control networks of genes. It’s an unproven method of drugmaking, and RG-101 had been Regulus’s most advanced bet.
The drug, however, encountered problems in clinical testing. Regulus saw a few serious cases of jaundice, or a yellowing of the skin and eyes, in early-stage testing of RG-101. That led to the FDA to suspend clinical development of RG-101 in June 2016. The suspension has held for a year, and in the meantime Regulus cut more than 30 percent of its workforce, overhauled its executive team—CEO Paul Grint, who in June 2015 had replaced founding CEO Kleanthis Xanthopoulos, resigned last month—and shifted its strategy. While focusing on RG-012, the company is also eyeing potentially better, safer versions of RG-101.
Regulus will consider whether to develop a new hepatitis C drug depending on the results of “an updated global commercial market assessment,” but that market has shrunk considerably thanks to a new wave of treatments. FDA-approved pills from Gilead Sciences (NASDAQ: GILD), AbbVie (NYSE: ABBV), and Merck (NYSE: MRK) can wipe out various strains of hepatitis C in a matter of months. Gilead’s hepatitis C drugs sofosbuvir (Sovaldi) and sofosbuvir/ledipasvir (Harvoni) were two of the fastest selling drugs ever, but their revenue numbers have since slumped considerably due to competition and a shrinking market, putting substantial pressure on Gilead to come up with another hit. Regulus had been trying to show, with RG-101, that a single long-lasting microRNA drug can shorten the needed time for a regimen of hepatitis C pills.
Regulus’s shares peaked at a $19.96 per share close in October 2014, but have trended downward ever since. It had $57.5 million in cash as of March 31. Here’s more on the company, its founding, and microRNA drugs.