Obituaries III: La Jolla Pharmaceutical Finally Slain by the Wolf as Luck Runs Out
Yet another casualty of the Darwinian attrition pummeling the biotech industry over the past 18 months -- another with plenty of history and name recognition -- is La Jolla Pharmaceutical Company (LJPC).
LJP spun out of diagnostics firm Quidel (QDEL) in 1989 to pursue development of a lupus drug that would eventually become known as Riquent (abetimus sodium).
The path was never easy. There've been no new drugs for lupus in half a century, despite the fact that the chemotherapies and high-dose steroids used to treat the autoimmune disease leave much to be desired. Through the years, the few companies that have attempted to tackle lupus -- Genelabs, Aspreva, Biogen Idec, Roche/Genentech -- have failed.
LJP had plenty of trouble with Riquent, too. In 1999, interim data from a Phase II/III trial were uninspiring and partner Abbott (ABT) dumped the drug. LJP felt data from a subgroup warranted pushing ahead to Phase III, but that trial failed as well. LJP tried for approval anyway, pointing to good data trends, but the FDA asked for another trial. BioMarin Pharmaceutical (BMRN) signed up to help fund the confirmatory trial, but a negative futility analysis derailed the deal.
With its stock -- which had once traded above $50 -- stuck below 50 cents, LJP planned to liquidate last summer. By that point, the company's largely retail investor base didn't care enough to vote on the measure, leaving LJP stranded in limbo. The beleaguered firm agreed earlier this month to a merger with Adamis Pharmaceuticals (ADMP).
There are plenty who would say LJP's demise was no surprise; that the drug was doomed to failure and the company should have cratered a decade ago. But plenty of people would have said the same about Human Genome Sciences' (HGSI) lupus drug Benlysta (belimumab) until the firm pulled a rabbit out of the hat with good Phase III data this summer. And shares of HGS are up nearly 7,000 percent from their 52-week low before that piece of good luck.
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Disclaimer: I worked with LJP years ago but hold no stock or other interest in the company.