Horizon tanks on Phase 3 failure | BioPharma Dive

Dive Brief:

• Horizon Pharma dropped 20% on Thursday morning after the company announced its Phase 3 trial of Actimmune in patients with the neuromuscular disorder Friedreich's ataxia failed to meet its primary endpoint.
• The STEADFAST trial also failed to meet its secondary endpoints, although no new safety concerns arose. Yet, the company, in conjunction with the data safety monitoring board, elected to end the trial and discontinue any extension studies.
• Actimmune is already approved by the Food and Drug Administration for the treatment of two rare diseases and is being studied in certain forms of cancer.

Dive Insight:

"Based on these data, management is discontinuing its FA program, including the 26-week extension and longterm safety study, which we had previously viewed as a possible 'second chance' for the program," wrote Mizuho analyst Irina Koffler in a note to investors on Dec. 8.

"We expect weakness in the stock today on the back of these data, and had been relatively negative on this trial all along, assigning only a 30% probability of success. The announcement also came quite early, which surprised us and likely, some investors as well," she added.

Investors were certainly taken off guard, knocking the stock down nearly 19% in morning trading on Thursday to linger near $15.80 a share. This is well off the company's 52-week high of $23.44

The company has been building out its rare disease portfolio and expects nearly 60% of its revenues to come from the portfolio by 2020. In September, Horizon agreed to buy Raptor Pharmaceuticals for $800 million, adding two other rare disease drugs.