Acelyrin shares decline after programming error disclosure
Conejo Valley-based Acelyrin saw shares plummet more than 30% on Nov. 28 after the biotechnology startup announced an error in one of its trials for its main treatment.
Acelyrin, which is a part of Westlake Village BioPartners investing portfolio, disclosed there was a programming error in a drug trial of izokibep, a treatment for psoriatic arthritis, on Nov. 27 after the markets had closed.
In a press release, Acelyrin disclosed that the protocol was programmed incorrectly by a vendor which resulted in a sequencing error that went further unidentified through the testing processes.
The company said it has dealt with the programming error, but that did not help shares from dovetailing on the following trading day.
Shares of Acelyrin closed at $5.88 on Nov. 28, down 32.4% from the prior trading day.
Founded in 2020, Acelyrin is a late-stage clinical biopharmaceutical company focused on providing patients with life-changing new treatment options by identifying, acquiring, and accelerating the development and commercialization of promising drug candidates.
Acelyrin’s izokibep was its first acquisition as it entered into a partnership with Swedish-based Affibody to develop and commercialize the drug.
Under terms of the agreement, Affibody will receive a $25 million upfront payment and is eligible to receive up to $280 million in additional regulatory and sales milestones, plus high single-digit to low double-digit royalties on sales, the Swedish firm said.
The company was founded with Series A capital from Westlake Village BioPartners, a venture capital firm that focuses on life sciences startups in the Conejo Valley, the rest of Ventura County and greater Los Angeles.
Acelyrin actually opened its virtual doors the same day the venture capital firm announced two new funds worth a total of $500 million.
The company held its initial public offering debuting at a price of $18 per share under the ticker symbol, SLRN.
During its May 5 IPO, the company generated $621 million and completed the largest clinical-stage biotechnology IPO ever, according to the company.
But since then, shares have not done so well.
After reaching as high as $28 a share, the stock has fallen nearly 70% since Sept. 11 when the biopharmaceuticals company announced discouraging results in a clinical trial evaluating the efficacy of its experimental lead drug, izokibep, in treating an inflammatory skin disease.
Despite that, Acelyrins believes its key drug candidate still holds promise.
In the company’s third quarter earnings, announced on Nov. 7, Acelyrin founder and CEO Shao-Lee Lin noted that the company is looking forward to Phase 2b results which are expected by the end of the first quarter of 2023 as well as results for its other proof of concept in thyroid eye disease, lonigutamab.
“Both programs are examples of the ‘diamonds in the rough’ we seek to build our portfolio — programs where, based on molecule characteristics, our collective experience and expertise, and the evolving scientific and medical understanding, we can establish a development plan that tests our hypotheses around clinically meaningful differentiation for patients, with emphasis on determining potential for disease resolution,” she said in a press release.
Acelyrin noted that research and development expenses were $74.6 million for the third quarter as compared to $12.5 million for the same period in 2022 as the company has undergone significant growth including expansion of the izokibep program, according to a press release.
General and administrative expenses were $19.9 million for the third quarter as compared to $2.9 million for the same period in 2022, mainly due to a stock-based compensation expense of $11.7 million.
The company’s net loss totaled $83.9 million for the third quarter of 2023, or 87 cents per share, compared to $14.4 million or $8.17 per share for the third quarter of 2022.
Acelyrin ended the quarter with cash equivalents and short-term marketable securities totaling $788.4 million by the end of the third quarter.
Acelyrin expects these to fund operations through key value-driving milestones across all three clinical programs.
Shares were flat after the company’s earnings until the programming error disclosure on Nov. 27.
The company recently moved to its new headquarters in Agoura Hills in late July. Agoura Hills is in Los Angeles County but is part of the Conejo Valley, a life sciences hub that includes Thousand Oaks in neighboring Ventura County.
More than 17 biotech companies call the Conejo Valley home.