RXi Provides Disappointing Clinical Update for Scarring Drug

At the Rodman & Renshaw investor conference today, the CEO of RXiPharmaceuticals dropped a little bombshell in the form of a disappointing clinical update on their lead clinical candidate, RXI-109 for the treatment or prevention of dermal scarring.  In that interim look for efficacy, RXI-109 and placebo were not really distinguishable in scar severity sending the stock down 30-40% in the middle of today’s trading session.

1301 study design

The 1301 study is the first of three phase IIa studies evaluating 109 in a number of different scar settings.  In this case, RXI-109 was administered following scar revision surgery on the lower abdomen.  Part of the same scar received either 3 injections of the self-delivering RNAi compound, another part placebo solution.  Half of the subjects (50% of the study/16 subjects have enrolled as of today), received 109 on days 1, 8, and 15 following surgery (cohort 1), the other half received injections on days 14, 21, and 28 following surgery, the latter apparently inspired by clinical design trends observed for competitor antisense drug from Pfizer/Excaliard.

I find that blindly adjusting your clinical design based on such competitive intelligence is a worrisome sign of lack of confidence.

1301 study results

The first interim look for efficacy took place at 1 month post-surgery.  Results were based on the blinded visual assessment of scar severity on a scale from 1 (good fine-line scar) to 10 (worst scar imaginable). 

Unfortunately, the close to 50% knockdown of target CTGF observed in a similar 3-dose phase I study, did not translate to an obvious improvement in scar severity: for the immediate treatment group, the VAS score was 2.0 for both the 109 and the placebo side of the scar; for the delayed treatment group, the VAS score was slightly better in the 109 side (2.0) than on the placebo side (2.5) even reaching statistical significance.

Before you get excited and buy into the biological rationalizations by the CEO for why it makes sense that delayed, but not immediate would exhibit such a benefit, note that a VAS difference of 0.5 on a scale from 1 to 10 would appear to be clinically meaningless despite the statistical significance.  Moreover, looking at the VAS scores across the board, it seems that the placebo side in the delayed treatment cohort is a statistical outlier as it should not have performed any different than the placebo cohort in the immediate treatment group.    

On the other hand, given that the scars have not had time to fully develop and the VAS scores were still so low, it is possible that real differences will emerge at later time-points such as month 3 when the next interim look will take place and it may thus be premature to declare the study or drug for that matter a failure.

RXi needs a plan B and investors patience

In light of the disappointing trial update, it may not be a coincidence that Geert Cauwenbergh today took the opportunity to talk more about their other, preclinical pipeline candidates in the dermatology and ophthalmology space in much more detail than had been the case.   

I am less excited about the prospect of RXi expanding their dermatology footprint given the relatively modest gene knockdowns observed, limited tissue penetration from the site of injeciton, and the cosmeceutical nature of their current line-up (acne, depigmentation etc).  By contrast, I am much more excited about  the prospect and value of self-delivering RNAi triggers in the ophthalmology space given the great unmet medical needs there and the highly encouraging tissue penetration/biodistribution data for self-delivering RNAi in that organ.

There will be more to talk about that in the future.  As stock market investors, however, one has got to wonder whether management is aware of that value and knows how to best exploit it (pro tip: VEGF is a no-no for RNAi in the eye).  Even more concerning is the fact that the majority shareholder (Tang Capital) still holds close to half of the company and is in the process of unloading it thereby putting constant pressure on the stock. And with only $10M in the bank, you know what the trip to the Rodman & Renshaw conference was all about.

So no more than a small starter position for me despite the steep sell-off today.