U.S.-based pharmaceutical producer Xoma has said that it will no longer pursue late-stage arthritis studies with its gevokizumab drug. The drug consists of an antibody used as a treatment for arthritis of the hand. The news has caused a dramatic fall in the company’s stock price. Industry experts believe that the company is losing over $1 billion in potential sales of the drug, and the result has been a 22 percent drop in Xoma’s stock price. The company was established in 2011 and is still trying to develop a drug that can hit the market. John Varian, Xoma’s CEO, has said that the company would now focus on treatments for skin disorders. It is expected that the company will attempt to use gevokizumab as a treatment for skin disorders, pyoderma gangrenosum in particular.
Some industry experts believe that if the company does well with a skin disorder treatment, it could recoup some of the $1 billion that it stands to lose from the end of arthritis studies. “The company said there were 100,000 patients in the United States for neutrophilic dermatoses, and with premium orphan drug pricing, they could make up for the loss of acne and EOA,” said Liana Moussatos, an industry analyst with Wedbush.
The company said there were no serious negative side effects when using the drug as a treatment for skin disorders. The company is also reviewing its data to see if there is potential for the drug to be used as a treatment for erosive osteoarthritis of the hand.