Incyte’s $750 million Escient Pharmaceuticals buyout has rapidly run into problems. Less than six months after closing the deal, Incyte has paused a key study over preclinical toxicology findings and axed another program altogether.
EP262, a MRGPRX2 inhibitor now called INCB000262, was the jewel of the takeover. When Incyte inked the takeover, the X2 candidate had shown proof-of-mechanism in chronic inducible urticaria (CIndU) and was on its way to delivering phase 2 data in chronic spontaneous urticaria (CSU). Now, enrollment in the key CSU trial is on pause while Incyte looks at “certain in vivo preclinical toxicology findings.”
Incyte has shared the data with the FDA and is working with the agency to determine the next steps. But the biotech is saying little publicly, with a spokesperson declining to share details beyond the bare bones of the situation outlined in the press release.
Evercore ISI analysts said in a note to investors that Incyte management remains “confident in the safety profile in the clinic and has noted no safety issues.” Management was surprised by the toxicology finding and hadn’t expected it to happen from deal diligence, the analysts said, but the biotech also framed the setback as one of the risks of buying assets before validatory clinical data drive up the price.
“Acquiring early-stage molecules like these in phase 1 studies presents a higher level of uncertainty in terms of the outcome, but also allows for an acquisition at a lower price,” Incyte’s spokesperson said in an email. “While this toxicology finding was unexpected, we believe in the mechanism of action and will leverage the data to inform the future development of this program and that of our backup molecules.”
The reference to backup molecules, which Incyte also made in the press release, suggests the biotech believes the safety signal may be specific to INCB000262 rather than a classwide problem for MRGPRX2 inhibitors.
Confirmation that the problem is specific to the molecule would give Incyte a shot at generating a return on the Escient takeover. The news would deliver a boost to other biotechs working on X2 inhibitors—and the investors who have poured hundreds of millions of dollars into them in recent weeks. Last month, Septerna raised $288 million in an initial public offering, and Evommune closed a $115 million series C.
Incyte has completed phase 2 trials of its X2 candidate in CIndU and atopic dermatitis. The analysts said the paused trial in CSU, a medical term for hives, is the most important of the three studies. Incyte has mostly completed enrollment in the initial trial, the analysts said, but is yet to start a second study.
“Given that the trial is short with a 6wk primary, we suspect that [Incyte] will still be able to get efficacy data from this trial to determine POC,” the analysts said. “Mgmt did not comment on if any dosing for enrolled pts is still ongoing.”
The next data drop will depend on talks with the FDA, the X2 results and Incyte’s plans for the backup compounds, but the analysts said it may not arrive in the first quarter given the competitive landscape.
Incyte shared news of the setback to the X2 program alongside the news that it has dropped another drug candidate it acquired from Escient. The biotech said phase 2 data on the MRGPRX4 inhibitor EP547, now called INCB000547, in cholestatic pruritus doesn’t support further development. Incyte stopped the program because of efficacy, according to the analysts, who added that EP547 was generally viewed as a lower probability of success addition to the deal.
Incyte’s share price fell 9% to dip below $70 in premarket trading.