July 20, 2017
By Alex Keown, BioSpace.com Breaking News Staff
BARCELONA – Shares of Spanish biotech company ORYZON Genomics have plummeted more than 23 percent after Swiss drug giant Roche ended a three-year-old developmental deal for the company’s leukemia and cancer treatments.
In its Thursday announcement, Oryzon said Roche’s decision to terminate the agreement was due to a portfolio prioritization. With Roche ending the deal, Oryzon will regain the rights to its investigational Lysine Specific Demethylase-1 (LSD1) inhibitor ORY-1001 for the treatment of patients with acute myeloid leukemia and small cell lung cancer from Roche. As part of its agreement with Roche, the larger company will complete a Phase I lung cancer trial, which Oryzon said should be complete within the next several months.
Carlos Buesa, chief executive officer of Oryzon, said his company was told Roche’s decision was not data driven, which could be good news for the future of the investigational drug. ORY-1001 is the company’s first clinical asset.
“During the next weeks, Oryzon will focus its efforts to regain the control of the asset as soon as possible to ensure the continuation of the clinical development plan without interruptions. We are fully committed to develop ORY-1001, a first-in-class, best-in-class LSD1 inhibitor that we believe has a clear potential in a broad range of tumors,” Buesa said in a statement.
Although Buesa said Roche’s decision did not have anything to do with potential problems with ORY-1001, investors have still been spooked. Shares of Oryzon, sold on the BME Spanish stock exchange, fell as much as 30 percent in early Thursday trading, but have climbed back up some during the afternoon. Shares of Oryzon Genomics are trading at €2.28, down from the opening price of €2.47.
The two companies struck the agreement in April 2014. Roche initially paid Oryzon $21 million in upfront cash. The Spanish company stood to gain more than $500 million in milestone payments.
Roche has seen a string of failed drug trials and with additional challenges from the growing biosimilar market could be forced to readjust its financial guidance reports for 2017. In addition to walking away from the Oryzon deal, Roche also terminated a Phase II cancer program it gained from its acquisition of Seragon Pharmaceuticals.
Also earlier this summer, Roche began tweaking its operational strategy by culling some positions and shutting down manufacturing operations at a Massachusetts facility that was part of its small molecule network. The company also sold off a large South Carolina facility to Patheon NV in November 2016.
