Menlo Therapeutics sinks after Phase 2 trial of serlopitant misses endpoints
Shares of Menlo Therapeutics are falling after the company announced its Phase 2 clinical trial of serlopitant did not meet its primary or key secondary endpoints. MTI-103 RESULTS: On Sunday, Menlo Therapeutics, which went public on January 25, announced results from MTI-103, the Phase 2 clinical trial of serlopitant for the treatment of pruritus in adults and adolescents with a history of atopic dermatitis. The study did not meet its primary or key secondary efficacy endpoints, and the trial showed no statistically significant difference between patients treated with serlopitant and patients treated with placebo. The ATOMIK, MTI-103 study, was a multi-center, randomized, placebo-controlled Phase 2 clinical trial conducted at 52 U.S. sites to assess the efficacy, safety and tolerability of serlopitant. The primary efficacy analysis compared the difference between serlopitant and placebo in the mean change in worst-itch numeric rating scale from baseline to week 6. A key secondary endpoint was a responder-rate analysis of a 4-point WI-NRS improvement at week 6. EXECUTIVE COMMENTARY: "While we are disappointed that the results in this Phase 2 trial of pruritus associated with atopic dermatitis did not reach statistical significance and did not show the same magnitude of treatment effect as in our prior pruritus studies, we do see in the results a pattern that shows numerical improvement in each serlopitant treatment group above the placebo group at every timepoint. This is our third pruritus study of serlopitant. Reduction of pruritus has been demonstrated in two prior Phase 2 studies, one trial in patients with chronic pruritus and one trial in patients with prurigo nodularis," said Chief Executive Officer Steve Basta. "We are initiating Phase 3 studies in prurigo nodularis this quarter, and we are looking forward to the Phase 2 results in refractory chronic cough in the fourth quarter of this year, and the Phase 2 results in pruritus associated with psoriasis by late 2018 or early 2019." ANALYST REACTION: On Monday, Jefferies analyst David Steinberg downgraded Menlo Therapeutics to Hold and cut his price target for shares to $20 from $41. The analyst said he is surprised that the Phase 2 clinical trial of serlopitant did not meet its primary or key secondary efficacy endpoints and has removed all revenue linked with the atopic dermatitis indication from his model. Steinberg continues to project successful outcomes for serlopitant's other ongoing development programs and looks forward to the key clinical data readouts in coming months, including Ph2 chronic cough data in the fourth quarter and Phase 2 pruritus associated with psoriasis data in late 2018/early 2019. Meanwhile, Piper Jaffray analyst David Amsellem called the miss of primary and secondary endpoints in the Phase IIb study a "big disappointment." The analyst, however, does not infer that the setback in atopic dermatitis "necessarily raises the risk" surrounding the prurigo nodularis Phase III trials. Prurigo nodularis is an altogether different condition, Amsellem told investors. He believes the trial miss "should not call into question the overall viability of serlopitant as an anti-pruritic agent." Amsellem reiterated an Overweight rating and $48 price target on Menlo Therapeutics. PRICE ACTION: Shares of Menlo Therapeutics have lost more than half their value on Monday morning, declining 71.3% to $10.09 in morning trading.