Renovo's Ferguson keeping all options open after Juvista setback

Renovo (LON:RNVO) chief executive Mark Ferguson said the board will consider every option including winding up the company after its lead drug, the scar treatment Juvista, failed to meet its goals in a major clinical trial.

The biotech group has £44 million in cash on the balance sheet, which could be re-distributed to investors if Renovo is liquidated. However it also has a number of other promising treatments.   

Speaking on a conference call shortly after the announcement, he said: “The board will consider all options open to it to maximise shareholder value.

“That scenario will be considered along with all others.....all scenarios will be explored.”

Earlier Ferguson said he was "shocked and surprised" Juvista had failed to meet its primary and secondary endpoints in the pivotal EU phase III trail on 350 patients. “This was a clear miss of the endpoint not a narrow miss,” he added.

Reflecting this the shares tumbled 50.5 pence, or 74 per cent, to stand at just 18 pence.  

The first order of business, Ferguson revealed, would be to ascertain why Juvista had failed. “We are very comfortable that the correct people were enrolled on the trial,” the Renovo chief executive explained.

“What is surprising is there seems to be variation between two ends of the scar that is much greater than we have seen before – and we need to get to the bottom of that.”

The study focused on patients requiring scar revision surgery. Half the wound was treated with Juvista and the other portion with a placebo.

What gave Ferguson and the Renovo team cause for hope was that in many cases one end of the scar appeared to have improved more than the other – suggesting Juvista was working.

“What I do know is as the data rolled in we saw differences between the two scar ends.  One looked good and the other looked poor,” Ferguson said.

“We were clearly blinded to this data and therefore we were quite optimistic when we saw data as it came as you could see the difference between the two ends of the scar.

“At no point did we have any inkling there was going to be greater variability.

“Our interpretation was the drug was working and the better end of the scar was drug treated.

“When the blind has been broken there was a more or less even distribution of the good and poor ends between the drug and the placebo.

“And that is very surprising and very shocking. At no point did we have any anxieties about the design of the trial, the execution of the trial and in fact I was quite bullish on the outcome.

“As I have always said if you can see a difference we have hope. If you can see no difference, you have no hope. And we had clear differences.”

The Renovo chief executive was unable to say whether the company would continue developing Juvista. That decision will be made once all the data is assimilated and assessed.

It is unknown also what partner Shire will do next. It has pumped US$125 million into Renovo on the strength of Juvista. It has a number of months to consider its options.

In the meantime the company is developing  Prevascar and Adaprev, also for scarring, and is in talks with cosmetic companies interested in using Juvidex in products.

Juvidex is thought to aid skin healing while reducing redness. Any tie-up will be a “low royalty” deal, Ferguson repeated today.