San Diego’s Laguna Pharmaceuticals has shut down, after early results from a late-stage trial of the company’s lone drug candidate revealed previously unseen safety concerns.
“If you’re going to fail, you want to fail quickly, right?” Laguna CEO Bob Baltera told me last week. “We didn’t fail. The drug failed.”
The drug was a 1,4-dialkylpiperazine derivative (Vanoxerine) intended to treat atrial fibrillation, a sputtering, irregular heartbeat that affects an estimated 2.3 million people in the U.S alone. ChanTest, a Cleveland, OH, company providing testing services to help drug developers assess cardiac risk, had acquired the compound more than a decade ago. In 2006, ChanTest spun out a new company, ChanRx, to advance the drug.
After raising $5 million in 2011 from Santé Ventures and ChanTest founder and CEO Arthur “Buzz” Brown, ChanRx reported Phase 2 results in 2013 that appeared very promising. Over three-fourths of the patients given the highest oral dose (400 mg) of Vanoxerine converted to a normal heart rhythm within 8 hours, and 84 percent converted within 24 hours—a success rate close to the electrical shock treatment known as direct current cardioversion.
To move into Phase 3 trials, ChanRx raised an additional $30 million in venture funding and recruited Baltera as CEO. As part of the deal, the company moved from Cleveland to San Diego, and changed its name to Laguna Pharmaceuticals. Vanoxerine was the only drug the company had under development.
“ChanRx came out of the biotech venture era where there was this love affair with single asset companies,” Baltera said. In other words, Laguna was going big or going home.
Two months into its roughly 600-patient initial Phase 3 trial, called Restore SR, researchers started to see side effects that would not have enabled Laguna to market the drug as widely as they had initially anticipated, Baltera said. “We were actually very surprised,” he said. “The [prior] Phase 2 study was robust.”
Baltera declined to say much about the side effects, describing them only as “safety signals.”
“The normal response in this business is to find a way forward,” Baltera said. “But it just wasn’t going to be commercially viable. Rather than trying to find any path forward, we decided to shut the company down.”
Laguna had about eight employees at the time, including part-timers, but there was no battle within the company over the decision, Baltera said. The management team recommended the shut down to the board. “We hadn’t spent all the money by the time we made the call,” Baltera said, but he declined to say more about financial aspects of the decision.
“In looking at the data, we could have narrowed the [target] patient population, but it wouldn’t have been a very successful drug,” he said.
