Benitec Biopharma Ltd. is winding down its lead program, the hepatitis C virus (HCV) candidate TT-034, terminating further development of the phase I/IIa drug. It said that increasing competition, "limited and diminishing partnering interest" and a long road to market suggested that "further investment in the program would not warrant additional expenditure or focus" beyond completion of the second-to-last cohort that had been planned for the small trial.

Benitec's board said it made the decision to discontinue the program, which sought to deliver a "one-shot cure" for HCV, following a review of the commercial opportunities for the program, noting that a number of effective therapies had become available for HCV since the company started its trial in January 2014. Furthermore, the Sydney-based company said that in recent months, several competitors had made improvements in the efficacy, delivery and success rates of their treatments while continuing to reduce pricing and treatment duration.

The changing landscape left Benitec's board believing that the program doesn't offer "the commercial value necessary to attract a worthwhile partnership deal." Representatives of Benitec's management, which will host a conference call Monday, were unavailable for comment prior to publication.

Company shares (NASDAQ:BNTC) fell 55 percent to close at $1.57 on Friday, following a similarly steep decline in its home market (ASX:BLT).

The company said it is committed to completing the collection of trial data and monitoring patients through the required long-term safety follow-up period for the phase I/IIa study and that final data supporting its primary and secondary endpoints will be reported during the fourth quarter of 2016.

TT-034 was Benitec's only clinical-stage candidate and was intended to treat patients with genotype 1 HCV, the most common type of infection in the U.S. It represented what the company said would have been the first systemic administration of a DNA-directed RNA interference-based (ddRNAi) therapeutic.

RESULTS TO DATE

While the company is losing its lead candidate, it will still see some value from the trial, which it sees as having validated its platform. "The data presented to date show that TT-034 transduces hepatic tissues, expresses the anti-HCV (small hairpin) RNA and has a favorable safety profile," Benitec's chief scientific officer, David Suhy, said in a statement. "Considering the novel characteristics of the drug, administered in a manner that cannot be withdrawn, we are pleased with the validity that TT-034 has shown in this trial. It has provided solid proof of concept for our ddRNAi platform and our other pipeline programs, particularly our hepatitis B program."

The primary endpoint for the fading phase I/IIa study is safety, measured by the incidence of serious adverse events and changes in clinical parameters. On that front, the company said, TT-034 appeared well tolerated, with no significant adverse events reported relating to administration.

Secondary endpoints for the study are efficacy-based, measured by small hairpin RNA expression in the liver, and sustained reduction in HCV viral load in the blood. As of November, eight patients have been dosed and the study is expected to be completed by the end of 2016. There have been no treatment-related serious adverse events observed in the study to date.

If the phase I/IIa trials were favorable, Benitec had anticipated starting a phase IIb/III trial in the second quarter of 2017, subject to obtaining additional funding. While it said that no significant financial obligation would arise from quitting the HCV program, it did not say how much money that action would free up.

SLOW ENROLLMENT

In a November regulatory filing with the SEC, Benitec said it was facing difficulties in enrolling patients in its trial of TT-034, citing the increased availability of new and effective HCV therapies, such as Gilead Sciences Inc.'s Sovaldi (sofosbuvir) and Harvoni (sofosbuvir/ledipasvir) and the fact that the early lower-dose cohort patients receive a subtherapeutic dose of TT-034.

Furthermore, Benitec said, sudden changes in patients' viral load, liver enzymes and other clinical parameters immediately prior to their dosing, as well as late withdrawal due to personal reasons, also impacted enrollment. Without sufficient numbers of patients for its trials, the company may have faced substantial difficulties fulfilling the expectations of the FDA and other global regulators.

With the HCV program moving into its rear view mirror, Benitec is turning its attention to three additional indications, hepatitis B, age-related macular degeneration and oculopharyngeal muscular dystrophy. It anticipates completing in vivo preclinical proof-of-concept studies for all three indications by the end of 2016.

Benitec acquired full rights to the preclinical ddRNAi-based hepatitis B therapeutic program for $2.5 million in July 2015. Prior to that, it was jointly developed by Benitec and Biomics Biotechnologies Co. Ltd.

To achieve its goals, the company will require additional financing to conduct clinical trials with those candidates. The company's August Nasdaq listing raised $13.8 million before costs. As of Dec. 31, its assets stood at A$27.8 million (US$19.8 million).

The company is also searching for a new permanent CEO following the departure of Peter French in December. Chief Financial Officer Greg West is the company's interim CEO.