Unfortunately, the Biotech world is not only composed of success stories. Active Biotech, a Swedish company focused on developing treatments for neurodegenerative diseases and cancer. The company, engaged with Ipsen, discontinued a Phase III study and is currently discovering the consequences of this failure the hard way.
Active Biotech’s business model, like many small red biotechs, is based on partnering with bigger pharmaceuticals companies. Since its creation, the Swedish company established 4 partnerships including 2 large ones, the first back in 2004 with TEVA Pharmaceutical and the second and largest in 2011 with Ipsen.
Ipsen agreed on a collaboration with Active Biotech for the Tasquinimod compound, studied for the treatment of prostate cancer in Phase II by the Scandinavians. The partnership between both companies consisted in an upfront payment by Ipsen of €25M for the conduct of the Phase III clinical trial, with an additional €200M reward with the achievement of clinical, regulatory and commercial milestones. This partnership enabled Active Biotech to begin a phase III study and to develop its internal activities.
Unfortunately, on April 16th 2015, Ipsen & Active Biotech announced their decision to discontinue the development of tasquinimod in prostate cancer and ended, therefore, their collaboration. Results of the Phase III study showed that tasquinimod could indeed reduce the risk of radiographic cancer progression or death compared to placebo but couldn’t extend overall survival. As a consequence, in just a few days, stock prices were divided by more than 2 as figures sank from €2,95 to €1,16.
Professor Tomas Leanderson, President and Chief Executive Officer of Active Biotech stated: “The outcome of the 10TASQ10 study is a major disappointment based on the promising phase II results. However, the data at hand is unambiguous and cannot motivate further development of tasquinimod in this patient population. I want to thank the clinicians, caregivers, patients and their families who were involved in this study.”
On the basis of its other key partnership, namely deleguating all the next steps (development, commercialization…) to TEVA, Active Biotech is now lacking in internal activities. Yesterday, the company had no other choice but to announce an adjustment of the organization. A rational choice that made 47 employees redundant… With a total of almost 60 employees and the redundancies, Active Biotech is now back to square one, hoping for better news in the near future.