CymaBay Therapeutics scraps two studies of liver drug; shares plunge

[November 26, 2019]  By Manas Mishra and Saumya Joseph

(Reuters) - CymaBay Therapeutics Inc said on Monday it was scrapping two mid-stage trials of its liver disease drug, after biopsies found a type of liver damage in some patients, sending its shares down over 75%.

The drug developer said it had observed "atypical" findings from the first set of liver biopsies, including autoimmune hepatitis, in one mid-stage trial that was testing the drug in patients with a fatty liver disease known as non-alcoholic steatohepatitis (NASH).

The findings were observed in patients who had shown an improvement in their condition during the trial, or had shown signs of disease stabilization.

The drug developer said it will terminate the NASH study as well as another mid-stage study testing the drug in patients with primary sclerosing cholangitis, while it would also halt a late-stage study of the drug in primary biliary cholangitis (PBC), an autoimmune liver disorder.

The company said it had started a series of investigations to better understand the biopsy results.

"Given the seriousness of what they've found, I believe it is now an open question whether the company can recover from this," said Ed Arce, an analyst with HC Wainwright.

The announcement comes after the failure of Gilead Sciences Inc's NASH treatment in a mid-stage study, and a separate trial failure of rival Conatus Pharmaceutical Inc's experimental NASH drug earlier this year.

"A lot of information at this moment is missing to really conclude that it's drug induced or not drug induced," Roth Capital Markets analyst Yasmeen Rahimi said.

She added that the main focus of the company has been on treating PBC and NASH has not been on their radar as much, given the competitive landscape.

"...if they would have said we're just halting NASH and continuing PBC, the stock wouldn't have taken a hit. When they're basically halting all clinical programs, it is really making people uncertain," Rahimi added.

Successful treatments for NASH have remained elusive, but the market remains lucrative with the potential to reach as much as $20 billion by 2030, as people with fatty diets increasingly develop the disease.

CymaBay shares tumbled 76.1% to a three-year low of $1.32 in early trading on Monday.

(Reporting by Manas Mishra and Saumya Sibi Joseph in Bengaluru; Editing by Rashmi Aich)

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