The third quarter's biggest disclosed biopharma partnership has hit a snag. Just a month after Regeneron Pharmaceuticals Inc. convinced Teva Pharmaceutical Industries Ltd. to pay $250 million up front and significant milestones to co-develop lead pain asset fasinumab, the FDA has placed a clinical hold on a phase IIb study testing the drug against chronic lower back pain, an indication Regeneron has been targeting in addition to osteoarthritis (OA) pain.

The partners' September deal made Regeneron eligible to receive up to $460 million in development and regulatory milestones related to fasinumab and potential sales milestone payments of up to $1.9 billion. Excluded from their agreement: certain territories in Asia where Regeneron already has a deal with Mitsubishi Tanabe Pharma Corp., of Osaka, Japan. (See BioWorld Today, Sept. 21, 2016.)

The hold and an FDA-requested amendment of the study's protocol were triggered by a single case of arthropathy observed in a patient receiving a relatively high dose of fasinumab and who entered the study with advanced OA. With dosing stopped, Regeneron undertook an unplanned interim review of results that it said showed "clear evidence of efficacy with improvement in pain scores" in all fasinumab groups compared to placebo at weeks eight and 12 of the study and that preliminary safety results are generally consistent with what has been previously reported with nerve growth factor (NGF) antibodies, the class to which fasinumab belongs.

The phase IIb study enrolled about 70 percent of the targeted 800 patients in four dose groups: placebo, 6 mg subcutaneously monthly, 9 mg subcutaneously monthly and 9 mg intravenously every two months. It's not clear whether the event that triggered the clinical hold occurred in the group receiving subcutaneous or I.V. dosing. Patients will continue to be followed for up to 36 weeks.

Based on the results, Regeneron and Teva plan to design a pivotal phase III study in chronic low back pain that excludes patients with advanced OA. That move would mirror exclusion criteria implemented in a phase III lower back pain study sponsored by Pfizer Inc. and Eli Lilly and Co., which are advancing a similar NGF antibody, tanezumab, and have excluded the enrollment of patients with osteoarthritis of the knee or hip.

George Yancopoulos, Regeneron's chief scientific officer, said that the company is "making data-driven decisions on phase III fasinumab dosing that we believe will maximize potential benefit for patients in need, while minimizing the likelihood of side effects."

Earlier this year, Regeneron reported that fasinumab helped 338 patients with moderate to severe OA pain in their hip or knee achieve statistically significant relief at week 16 of a phase II/III study. The trial was the first to test subcutaneous delivery of the drug in patients with significant baseline pain who were intolerant of or inadequately served by acetaminophen and at least one oral nonsteroidal anti-inflammatory drug and an opioid. Despite the drug's benefits, more participants treated with fasinumab during the study also reported neuro-musculoskeletal adverse events (17 percent) than those given a placebo (6 percent). Also, four cases of rapidly progressive osteoarthritis were recorded, one in each of the 3 mg, 6 mg and 9 mg fasinumab dose groups. (See BioWorld Today, May 3, 2016.)

A 36-week analysis of data from the phase II/III trial, which ultimately went on to enroll 421 patients and was disclosed Monday, found that the incidence of adjudicated arthropathies was "potentially dose-dependent, with a higher rate of patients experiencing arthropathies in the higher dose groups," including a 12 percent incidence in the 9 mg group, a 7 percent incidence in the 6 mg group, a 5 percent incidence in the 3 mg group and a 2 percent incidence in the 1 mg group. Patients on placebo also had a 1 percent incidence of arthropathies. "Based on these data, the companies are planning to advance only lower doses in the ongoing fasinumab osteoarthritis pivotal phase III program, subject to discussion with the FDA and other health authorities," Regeneron said.

Though the FDA has put the fasinumab program on clinical hold before, it did so with what seemed to be minimal consequence at the time. In February 2011, a vascular necrosis of the joint and joint replacements seen in other anti-NGF programs were taken as signs of a class effect, leading to the hold. At the time, no studies of the drug were enrolling or treating patients.

Analyst reaction to the most recent clinical hold was mixed, ranging from relief that the event gave Regeneron and Teva insight into how best to design their phase III lower back pain study to deep pessimism about the program's future. Roth Capital Partners analyst Joseph Pantginis saw "a time-out to adjust the fasinumab game plan," reiterating a "buy" rating on the stock and a $520 price target.

Leerink Partners analyst Geoffrey Porges was less enthused, "reducing our probability of success to zero, and removing all fasinumab revenue (and future milestones) from our model and REGN valuation." Leerink holds an "outperform" rating on Regeneron's shares and a $513 to $530 price target.

At Monday's close, Regeneron (NASDAQ:REGN) shares had fallen $4.95, to $366.73. Teva's shares (NYSE:TEVA) fell $1.17, to close at $41.79.