Update: BioMS

As predicted in last months post here and on seekingalpha.com (http://seekingalpha.com/article/148356-bioms-hype-or-hope), the Phase III, MAESTRO-01 study of 610 patients did not meet its primary endpoint of disability reduction and the stock price dropped precipitously.  Other endpoints also did not meet significance.  BioMS and Lilly decided to terminate MAESTRO-02 and MAESTRO-03 studies.  Terminating the second Phase III likely means there was no suggestion of efficacy.  One PR mentioned that the placebo group did not progress much, which would make a treatment effect harder to prove.   Blaming the placebo group is easy.  However, with 610 patients, the two groups should have been very similar and that sort of bias unlikely.  Certainly, the possibility that all patients did not progress as much as expected could decrease the likelihood that a mildly effective medicine could not prove effects on disability progression.  But, a moderate or very effective medicine would have still shown effect.  One need only look at the Phase II Campath or Phase III cladribine studies aganins active comparator to see how moderate or strongly effective medications can prove efficacy even when comparator groups are less active than predicted.  I haven’t seen details from MAESTRO yet but look forward to seeing other details, specifically average EDSS at entry.  

I expounded more on the reasons that I felt the Phase III would fail at seekingalpha (see link above).   Most importantly, the decision to proceed to expensive Phase III testing (1100 patients in 2 studies) was done prematurely based entirely on a very small study of 32 patients, further split into 20 patients with HLA-DR2 or DR4.  These 20 patients were further split into 14 SPMS and 6 PPMS patients, a ridiculously small number of patients to try to analyze.  No attempt was made to determine if every 6 month dosing was best by doing a larger and more controlled phase II looking at other doses.  Maybe the medicine would have worked with monthly dosing.  Second, the mechanism of action — tolerance induction — is unlikely as the MINDSET RRMS study failed to show an effect on inflammation, much more suscetible to tolerance induction than the degeneration of SPMS.  I may have felt different about the prospects if a plausible MOA was advanced and supported by evidence.   An additional reason I may not have mentioned is that 2 years may have been too short for the study. 

As long as I’m rambling, I’ll add my two cents about small companies in Biotech and the decisions to proceed to phase III.  BioMS  could not have proceeded as far as they did without either a partnership, private equity or a second public offering.  They rightly calculated that a product just starting Phase III would have more value than one that just has a 20 patient phase II.  Initiating the MAESTRO studies allowed them to gain a reasonably good deal with Lilly, a company that could easily spare 97 million (87 + 10 milestone at 200 patient review) to have a shot at a 1 - 2 billion dollar a year drug.   Thus, BioMS had nothing to lose by rushing the drug along.  A larger company would have done a larger phase II forst and then decide whether to advance the drug to expensive phase III studies or just let the agent die.  BioMS, with one drug, could not afford to let the drug die in Phase II.    I’m going to keep this in mind when I look at other small companies that may have rushed a product along. 

At this point the company has about 70 million dollars but will need to wind the study down,with payments to the CRO and investigators and likely has other payables.  Thus,a price about 40 cents is probably appropriate.  With the Phase III stopped, I do not think there will be any further study with this drug.