GlobeImmune shares plunge 50 percent on news of trial results

LOUISVILLE – Biopharmaceutical company GlobeImmune Inc. (Nasdaq: GBIM) saw its share price dive more than 50 percent Wednesday after the company announced that its hepatitis B drug candidate did not show a reduction of the disease at the end of a 24-week study, even in patients receiving the highest dose.

Shares of Louisville-based GlobeImmune were trading at $4.00 apiece early Wednesday afternoon after closing at $8.24 the previous day. Shares had opened Wednesday at $3.33, their lowest mark ever since the company went public last summer.

GlobeImmune is developing GS-4774 with Gilead Sciences Inc. (Nasdaq: GILD), whose share price was up nearly 3 percent Wednesday. GlobeImmune officials said that the primary endpoint of the Phase 2 study in patients with chronic hepatitis B was at 24 weeks. They did note that, at 48 weeks, patients in the study with the highest dose of GS-4774 did see some reduction in the hepatitis B surface antigen (HBsAg), but patients at lower dosages did not. The company stated that the drug was found to be “generally safe and well tolerated.”

GS-4774 is a therapeutic vaccine designed to activate a T cell immune response to eliminate virus from cells containing Hepatitis B, a liver infection affecting roughly 400 million people worldwide. Rather than merely keeping the disease under control as most current drugs do, GS-4774 is being developed in the pursuit of a cure.

Kirk Christoffersen, vice president of corporate development for GlobeImmune, said Wednesday in a phone interview that the recently completed Phase 2 trial was conducted in 175 patients who already had the disease under control with the use of oral antiviral drugs. The study looked at three different dosage levels, as well as a control group.

A second Phase 2 trial is also being conducted with GS-4774 in another group of 175 patients who are newly diagnosed with hepatitis B or who have never received therapy. Results from that trial are expected in the middle of next year.

“In this patient population, in many ways, we didn’t achieve the primary endpoint for the study,” Christoffersen said. “But we did see biologic activity in this. We did see a dose response. We did see in select patients a reduction in HBsAg, a marker of a cure.”

In addition to GS-4774, GlobeImmune has a deal with Celgene Corp. focused on discovery, development and commercialization of cancer drug candidates.

Founded in 1995 as a spinoff of University of Colorado technology, GlobeImmune raised a Series A funding round in 2003 and went on to raise a total of $119 million in private equity before going public last year with an initial public offering that raised $17.25 million in gross proceeds.

The company went public in July for $10 per share. The share price has been on a rollercoaster ride since then, climbing as high as $15 in the weeks following the initial public offering before losing more than two-thirds of their value by October. Shares had rebounded in recent months and closed as high as $10.15 just last month.

GlobeImmune, which has about 22 employees, has yet to generate revenue. Earlier this month, the company reported a first-quarter loss of $1.6 million, and company officials said then that the company had enough cash to fund operations through the middle of 2016. Christoffersen said the company continues to evaluate options for raising future funding.

“We believe that this first Phase 2 trial of GS-4774 in virally-suppressed patients suggests initial biologic activity at the highest dose tested,” GlobeImmune president and CEO Timothy Rodell said in a prepared statement. “We look forward to collaborating with our partner Gilead Sciences Inc. to identify potential next steps for GS-4774 in this patient population as well as to seeing the results from the second ongoing Phase 2 trial of GS-4774 in HBV treatment-naïve patients.”