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Menlo Stock Plunges on Phase II Chronic Cough Study Failure

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Menlo Therapeutics Inc. announced disappointing top-line data from a mid-stage study evaluating its sole pipeline candidate, serlopitant. The phase II study — MTI-110 (TUSSIX) — was evaluating the candidate for the treatment of refractory chronic cough.

The phase II study was evaluating the NK1 receptor antagonist, serlopitant, for change in 24-hour cough frequency from baseline after 12 weeks of treatment versus placebo. Data showed that patients treated with serlopitant had 31% less reduction in 24-hour cough frequency compared to placebo. Moreover, 44% of the patients treated with the candidate achieved a 30% or greater reduction in 24-hour cough frequency versus 51% for placebo.

The company has decided to terminate the study following its failure to meet the primary endpoint and key secondary endpoints.

Menlo’s shares plunged almost 40% on Oct 8, following the news. Shares of the company have declined 78.8% so far this year compared with the industry’s decline of 10.2%.

 

Although Menlo has decided to stop development of serlopitant in refractory chronic cough, the key development program of the candidate for treating pruritus - skin itching, associated with various conditions - will continue. Serlopitant has successfully completed two phase II studies, which evaluated it in patients with chronic pruritus and pruritus associated with prurigo nodularis.

A phase II study is currently evaluating the candidate for treating pruritus associated with psoriasis with data expected in December 2018. The company has plans to initiate a mid-stage study to evaluate serlopitant as a treatment for chronic pruritus of unknown origin in 2018.

Menlo is also enrolling patients in two phase III studies, which will evaluate the candidate in patients with pruritus associated with prurigo nodularis in the United States and Europe. Data from the study is anticipated in the first half of 2020.

Successful development of serlopitant in these ongoing studies is critical for Menlo’s growth prospect. The company had in-licensed serlopitant from Merck (MRK - Free Report) in 2012.

There are several pharma companies developing treatment for pruritus. Among these companies Vanda Pharmaceuticals Inc. (VNDA - Free Report) , OPKO Health, Inc. (OPK - Free Report) and privately-held Nerre Therapeutics are developing NK1 receptor antagonists, which may directly compete with serlopitant.

Zacks Rank

Menlo currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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