Regulus Therapeutics Inc. is halting development of its lead microRNA candidate, RG-101, an N-acetylgalactosamine (GalNAc)-conjugated asset targeting miR-122 in chronic hepatitis C virus (HCV), rather than pursuing resolution of a clinical hold placed by the FDA last June following a second case of jaundice in the phase II program.

The La Jolla, Calif.-based company also said partner Astrazeneca plc plans to terminate development of AZD-4076 (RG-125), a GalNAc-conjugated agent targeting microRNA-103/107 to treat nonalcoholic steatohepatitis (NASH) in individuals with type 2 diabetes and prediabetes. Combined with some pruning of its preclinical pipeline, Regulus said the moves will allow it to focus on RG-012, a single stranded, chemically modified oligonucleotide that binds to and inhibits the function of miR-21, to treat the orphan disease Alport syndrome.

"We're pleased with the decisions we've made," Jay Hagan, named last month as the company's president and CEO, told BioWorld. "We're more disciplined in terms of how we're utilizing our resources and applying strict development, regulatory and commercial considerations to advance what we're doing in the clinic."

Investors were circumspect, dropping shares (NASDAQ:RGLS) as much as 25 percent before the stock closed the day at $1.17, a loss of 23 cents, or 16.1 percent.

Regulus is completing an ongoing study of RG-101, expected to conclude next month, to follow enrolled patients for one year, Hagan explained, and the company plans to share accumulated data with the FDA. The clinical hold occurred because the mechanism behind the two incidents of jaundice was uncertain, then-president and CEO Paul Grint explained at the time. The FDA continued the hold in January. (See BioWorld Today, June 29, 2016.)

In the interim, the company analyzed preclinical and clinical data, and "we believe we've identified the mechanism by which we were seeing the hyperbilirubinemia, and it relates to a specific transporter that has lower levels of expression in patients with hepatitis C," said Hagan, who previously served as chief operating officer, principal financial officer and principal accounting officer at Regulus.

Inhibition of conjugated bilirubin transport by RG-101, coupled with the preferential uptake of RG-101 by hepatocytes "created a bit of a perfect storm of elevated bilirubin," he added.

The jaundice cases were self-limiting and resolved on their own, Hagan quickly added. Nevertheless, with additional preclinical work and the development of positive and negative controls, Regulus identified other compounds that possessed the same antiviral potency as RG-101 without inhibiting the bilirubin transporter.

Although excited about potential candidates that "hold more promise" in developing an HCV therapeutic regimen, Regulus won't move forward until it evaluates the commercial landscape, Hagan acknowledged, suggesting continued opportunity for a "dramatically shortened" treatment regimen – as little as one to two weeks – with a well-characterized safety profile.

"We've always thought there would be an opportunity to improve the standard of care, in terms of convenience and compliance and the burden on the health care system," Hagan said. "If we put another program into development, that's where we would squarely focus."

'Primary care is not where we want to play'

The NASH program partnered with Astrazeneca grew out of a research program between the companies that dated back to 2012. The London-based pharma paid $28 million up front in a combination of cash and equity in return for the right to develop three targets, including microRNA-33 for cardiovascular and metabolic disease. (See BioWorld Today, Aug. 16, 2012.)

Based on published data, Astrazeneca was focusing development of RG-125 on a metabolic target with impacts on glycemia and lipid metabolism, Hagan pointed out. Regulus received a $2.5 million milestone payment from Astrazeneca in 2015 when the IND for RG-125 was accepted by the FDA but now foregoes up to $495.5 million in future milestone payments.

Regulus has a preclinical program targeting NASH that focuses more on the fibrotic nature of the disease, downstream from the relationship between NASH and metabolic syndrome. But that, Hagan said, is an area that's more primary care in nature.

"If we were to spend any development dollars on this it would have to be stacked up against the other compounds that we have in earlier stages of development and what we think is the best product profile," he said. "As a small company, primary care is not where we want to play."

That said, Regulus is in discussions with potential partners about its preclinical NASH effort. Because Astrazeneca was running the RG-125 program, Hagan said he couldn't speculate on whether the move on RG-125 was related to efficacy, safety or the agent's competitive profile. The pharma has up to 12 months to wind down its clinical program and return the asset and data.

Regulus also said it stopped work on RGLS-5040, a preclinical unconjugated inhibitor of microRNA27 that it was advancing to treat cholestatic disease, based on the competitive landscape and results from repeat pharmacology studies as part of IND-enabling work. The company will nevertheless continue to explore therapies targeting genetic forms of cholestatic disease.

In short order, changes to the Regulus pipeline left RG-012 in Alport syndrome as the company's primary and only clinical focus. Hagan said the company is "moving swiftly" on the asset. At the behest of the EMA, Regulus conducted a multiple ascending dose phase I study, now complete. The phase II program is on track after Regulus incorporated changes to the protocol to accelerate enrollment, improve statistical power and potentially achieve proof of mechanism data by the end of this year.

HERA is now a randomized, two-arm (1:1), double-blind, placebo-controlled phase II proof of concept study, modified to increase enrollment to 40 patients, with dose frequency adjusted to once every other week. A separate renal biopsy study will evaluate renal tissue pharmacokinetics, target engagement and downstream effects on genomic disease biomarkers.

Data from the renal biopsy study is expected by year-end, with interim data from HERA expected by the middle of 2018 and top-line results around year-end 2018.

Sanofi SA, of Paris, holds an open option to license the program through a date that has not been disclosed but, essentially, reflects a period of time following conclusion of the one-year HERA study. (See BioWorld Today, June 23, 2010.)

"Depending on what we see, if we have an incredible result at the interim, that could be sufficient for Sanofi to decide to jump in," Hagan said.

Regulus also has RGLS-4326, an unpartnered preclinical asset targeting anti-miR-17 for the treatment of autosomal dominant polycystic kidney disease. IND-enabling toxicology, repeat pharmacology and manufacturing work are complete, and a filing is expected by year-end 2017.

When Regulus restructured last month, Grint stepped down and the company's work force was reduced by 30 percent. The company ended the first quarter with $57.5 million in cash and cash equivalents and a first quarter cash burn of approximately $18.5 million, which executives said would be "significantly decreased" going forward, with the aim of extending the company's financial runway to mid-2018.