A double dose of bad news
Sweden’s Karo Bio AB has been hit hard by toxicity issues with its lead compound eprotirome. The anti-cholesterol drug – which was in Phase III clinical development – proved unsafe in a long-term animal tests. The drug lead to cartilage damage in dogs after 12 months of exposure. “These unexpected findings mean that it cannot be excluded that humans could suffer from similar cartilage damage,” said Karo Bio in a statement, which indicated it had spent around €11m (SEK 100m) on the eprotirome programme to date, with another €6.2m (SEK 55m) still to come in wind-up costs. “Eprotirome has been a project with great potential, but also a project with risks,” commented Karo Bio CEO Per Bengtsson. “Unfortunately, the risks associated with long-term use do not outweigh the benefits, which is why we are forced to make this difficult decision.” In the wake of that news, the Huddinge-based company announced it was also giving up its plan to spin off its preclinical development business. Karo Bio had intended to sell it to new owners in order to strengthen its financial position. But with the termination of the eprotirome program, the developer is now faced with having to interest investors in the prospects of the company’s other projects and its collaboration with Pfizer. The US drug giant agreed last December to fund research of the biotech’s drugs that target the RORgamma pathway to fight autoimmune diseases such as multiple sclerosis and rheumatoid arthritis. At the end of February, Karo Bio announced it was laying off 17 employees – a quarter of its workforce. Together with other measures, this should save cash and keep the company afloat until at least 2013.