Epizyme is scaling back research on its lead drug as a treatment for a type of blood cancer after reviewing discouraging data, the company announced Thursday in its second quarter earnings call.The Cambridge, Massachusetts-based biotech is giving up on tazemetostat as a monotherapy and in combination with prednisolone for treating diffuse large B-cell lymphoma (DLBCL). Other combination trials with the drug will continue, the company said.While Epizyme remains hopeful for tazemetostat’s success, the company continues to lose money and test investor patience. Epizyme posted a net loss of $29.1 million for the second quarter while reporting its financials in a pre-market earnings call Thursday. Shares slumped following the call, sliding down 26% in morning trading.
Founded in 2007, Epizyme is still working to advance its main drug tazemetostat into late-stage testing.
Tazemetostat is ongoing mid-stage clinical tests for a wide range of diseases, including non-Hodgkin’s lymphoma, mesothelioma, epithelioid sarcoma (ES) and ovarian cancer. While the drug’s potential drove Epizyme’s market cap to a peak of more than $1.3 billion this year, the company now stands at roughly half of that as the drug continues to hit roadblocks.
Now, Epizyme is cutting back its clinical trial ambitions with tazemetostat for DLBCL after reviewing interim data from an ongoing Phase 2 trial. Epizyme said in a statement that “the clinical activity seen in these cohorts is not sufficient to warrant further development of tazemetostat in DLBCL as a monotherapy or in combination with prednisolone.”
The company has two additional ongoing DLBCL studies, testing its drug in combination with Tecentriq (atezolizumab) and R-CHOP, and says it will focus on ES and follicular lymphoma.
“We believe the actions we have taken will allow us to capitalize on our near-term tazemetostat opportunities while also extending our cash runway,” company CEO Robert Bazemore said.
The trial discontinuation news follows a partial clinical hold the Food and Drug Administration placed on tazemetostat trials, halting new enrollment following a safety report of one patient who developed a secondary T-cell lymphoblastic lymphoma.
Bazemore said lifting the hold is a top priority in the second half of 2018. The company said it has reconsented all its patients with an updated consent form and completed a “comprehensive assessment of tazemetostat safety data.”
Epizyme plans to finalize its FDA response in the coming weeks and anticipates the hold will be lifted following that.
Equity analysts were already downgrading the company before Thursday’s earnings call. On July 3, Leerink slashed its expectations for tazemetostat’s 2023 sales forecast from $684 million to $292 million.
The investment firm expressed diminished confidence in the company based on the drug’s slow development, the clinical hold and continued uncertainty over Epizyme’s upside.
But there has been some progress for tazemetostat in 2018. Epizyme announced plans to release Phase 2 data in treating ES as a monotherapy in October at a conference. Epizyme said interim data from the 62-patient cohort has shown a consistent objective response rate with the initial 31 enrolled patients.
The company said it expects to submit tazemetostat’s first New Drug Application for ES treatment in the first half of 2019.
Yet, the ES news is mostly baked into the cake. In July, Leerink gave an 80% probability of success for tazemetostat in ES and was actually expecting its NDA to come in the second half of 2018.