Biotechnology stocks can be as volatile as anything in the market, especially those that are relatively thinly traded. Positive data – or even expectations of positive data – from a clinical trial can send valuations soaring. The opposite is, of course, equally true. For Lpath, Inc. (NASDAQ:LPTN), a company focused on lipid-targeted therapeutics, the stock price got a double whammy in the last two months, erasing most of the company’s value.
Shares of LPTN have been in a slow and steady slide since hitting $10.85 in early 2011, but managed to rise to a five-month high in March at $3.75 ahead of results from a Phase 2a trial of drug candidate ASONEP for treating kidney cancer patients that had failed previous therapy. In a matter of days, the stock lost more than 30% of its value from that high as the trial failed to meet its primary endpoint of 25 out of 39 patients remaining progression free two months after treatment, although there were some positives to be taken from the results.
Muddling sideways and slightly lower to around $1.70 per share since, the stock price of Lpath cratered 80 percent on Wednesday upon news that Lpath’s treatment for wet age-related macular degeneration (wet AMD) patients missed its primary and key secondary endpoints in a Phase 2 trial. A chronic eye disease generally caused by abnormal blood vessels that leak fluid or blood into the macula, wet AMD is a leading cause of vision loss and blindness in people over 50 years old.
Lpath had been conducting the "Nexus" study, a 158-patient, four-arm, double-blind Phase 2 trial evaluating anti-S1P antibody iSONEP either as a monotherapy or as an adjunct for safety and efficacy in wet AMD patients that responded poorly to at least three previous injections of anti-VEGF (vascular endothelial growth factor) drugs, the current standard of care for wet AMD. iSONEP is a monoclonal antibody that binds to sphingosine-1-phosphate, blocking the bioactive lipid implicated in inflammation and fibrosis associated with progression of wet AMD.
One of four products in development by Lpath, iSONEP is the lead product candidate with optimism around its potential following a Phase 1 trial of 15 patients previously meeting its primary endpoint (safety) and secondary endpoint of a positive biological activity in several patients. In 2010, Pfizer (NYSE:PFE) entered into an agreement with Lpath for an exclusive option for a worldwide license to develop and commercialize iSONEP.
The primary endpoint of the Nexus study was mean change in best corrected visual acuity (BCVA) by Early Treatment Diabetic Retinopathy Study (ETDRS) from Day 0 to Day 120. At day 120, patients who received intravitreal injections of iSONEP either alone or in combination with anti-VEGF therapy failed to show a statistical improvement in visual clarity. The data collected did show iSONEP again to be safe and well tolerated across all treatment regimens.
Full study results will be presented during the Retina Subspecialty Days in conjunction with the American Academy of Ophthalmology in Las Vegas in November.
Lpath says that it will reduce its workforce and evaluate its pipeline in order to conserve working capital while it decides which development programs can create value in the near term. With the restructuring, Lpath thinks it has enough cash and committed funding to continue developing its other products through June 2016. In addition to the aforementioned drug candidates, the San Diego-based company is also working on Lpathomab, an anti-LPA antibody waiting for the FDA to give the okay to start a Phase 1 trial for neuropathic pain, and Altepan, an anti-leukotriene in pre-clinical studies for inflammatory bowel disease, respiratory disease and inflammation.
LPTN shares closed Tuesday trading at $1.71 and sunk as low as 32 cents in Wednesday trading on a massive surge in volume as traders exited positions. More than 5.4 million shares have traded hands, compared to an average three-month volume around 50,000. With just over an hour left in the trading day, shares are holding just above the day’s low. At 35 cents per share, Yahoo Finance shows Lpath’s market capitalization at a meager $6.98 million.
