GlobeImmune Hep B drug fails mid-stage study, shares plunge

Thursday, May 28, 2015

Drug developer GlobeImmune Inc said its experimental hepatitis B drug did not reduce infection in patients after 24 weeks of treatment in a mid-stage study, sending the company's shares down as much as 60 percent to a record low.

GlobeImmune, which is developing the drug with Gilead Sciences Inc, is among several drugmakers looking to tap the demand for hepatitis B treatments as hepatitis C drugs flood the market.

Hepatitis B is being seen as the next big opportunity in the liver disease market as it is the most common liver infection, affecting about 400 million people worldwide.

However, hepatitis B infection is much more difficult to treat than hepatitis C.

GlobeImmune, which had a market value of $47 million as of Tuesday's close, is developing three other drugs for infectious diseases and five for different types of cancers.

In the trial, the company's hepatitis B drug, GS-4774, was tested in 178 patients who were already on oral antiviral treatment.

Gilead's liver drugs portfolio includes its blockbuster hepatitis C drug Sovaldi and Harvoni and the company has another hepatitis B candidate, GS-9620, in its pipeline.

With GS-4774 failing the study, Gilead would have to look at other drug developers to find the right hepatitis B drug for its portfolio, analysts said.

Other companies developing hepatitis B drugs include Arrowhead Research Corp, Canada's Tekmira Pharmaceuticals Corp , Isis Pharmaceuticals Inc and Assembly Biosciences Inc.

"(Gilead)... is probably watching two leading albeit early players in Hep B: Tekmira and Assembly Biosciences," RBC Capital Markets analysts wrote in a note.

GlobeImmune's shares were down 51.7 percent at $3.98 in noon trading on the Nasdaq on Wednesday.

The stock, which was the top percentage loser on the exchange, hit a record low of $3.33 earlier in the session.

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