Publication Exclusive: Fallout from failed clinical trials poses challenges to companies

So far in 2015, four different ophthalmic products in phase 3 clinical trials failed to meet their primary endpoints. Ocular Surgery News spoke with three of these companies to find out what happened and how they responded. Their stories offer a telling glimpse at the challenges and opportunities companies face when endpoints are missed in clinical trials as part of the overall innovation cycle.

“Private companies often simply learn from their experience and make appropriate adjustments to their research and business plan. They continue on as long as their investors are optimistic they will eventually create value,” OSN Chief Medical Editor Richard L. Lindstrom, MD, said. “Public companies must disclose any material event in a timely fashion and usually see a significant fall in their share price, usually in the 20% to 50% range, but it can be even more if it is an FDA trial not approved by a panel.”

Richard L. Lindstrom

As for how companies regroup after failure, “they study the data, learn, negotiate with the FDA and move forward, usually with an adjustment in the clinical trial plan and additional studies,” according to Lindstrom, who over the past 35 years has been an angel investor, consultant and/or medical advisory board member for more than 60 companies, mostly in the ophthalmic field. He currently serves on the board of directors for three publicly traded ophthalmic companies and six private ophthalmic businesses. Lindstrom also serves as a board member for three private non-ophthalmic entities.

Failure to meet endpoints

Sometimes with failure, the product or the indication is changed, Lindstrom said. “Basically, one does R&D and learns every day, applying those learnings and iterating the product forward to eventual regulatory approval and commercialization. Even after commercialization, learnings continue, and one adjusts the product indications and method of use,” he said.

In a privately funded company, much of this revamping occurs under the radar, according to Lindstrom. But in a publicly traded company, all is disclosed and subjected to broad public evaluation, “with resultant large swings in share price.”

Take the example of Ocular Therapeutix, whose stock fell 30% within a few days after the company announced in April that its second of two phase 3 studies of Dextenza, a sustained-release dexamethasone intracanalicular depot in development for the treatment of post-surgical ocular inflammation and pain, failed to meet one of its two primary endpoints: reduction of ocular inflammation after cataract surgery. As of mid-July, the stock had rebounded some, due to communicating a clear path forward.

“Dextenza met the endpoint for ocular pain in both of our phase 3 studies and our phase 2 study; however, due to an unusually high placebo response rate, there was not a statistically significant absence of inflammatory cells in the anterior chamber compared to a placebo vehicle control punctum plug in this second phase 3 study,” Amar Sawhney, PhD, chairman, president and CEO of Ocular Therapeutix, said, noting that the inflammation endpoint was attained in the other two trials.

After the depot is inserted, Dextenza elutes drug over a 4-week period. The endpoint was day 8 for pain and day 14 for inflammation.

Sawhney said that the study’s shortcoming in treating inflammation “was not a big miss, a matter of several patients” in the 240-patient trial. Still, “we were disappointed that we did not meet both endpoints.”

Click here to read the full cover story published in Ocular Surgery News U.S. Edition, September 10, 2015.