ARTICLE | Clinical News

DiaPep277: Development discontinued

September 15, 2014 7:00 AM UTC

Hyperion is discontinuing DiaPep277 after discovering research misconduct in development of the Type I diabetes product by employees of Hyperion's Andromeda Biotech Ltd. subsidiary. Hyperion said it uncovered evidence that some Andromeda employees colluded with an Israeli biostatistics firm to improperly receive and manipulate unblinded data from the Phase III DIA-AID1 trial and received unblinded data from the ongoing Phase III DIA-AID2 trial. Hyperion expects to complete DIA-AID2 in 1Q15, but the company will not invest further in DiaPep277. Hyperion said the misconduct did not involve its own employees. It has suspended a group of Andromeda employees, is notifying regulatory authorities and will explore legal options. Hyperion expects to record a non-cash impairment charge of $25-$55 million in 3Q14.

In June, Hyperion acquired Andromeda from Clal Biotechnology Industries Ltd. (Tel Aviv:CBI, Tel Aviv, Israel) for $20.5 million up front and up to $550 million in milestones, plus tiered royalties on DiaPep277 sales of up to 25%. In February, Andromeda paid Teva Pharmaceutical Industries Ltd. (NYSE:TEVA, Petah Tikva, Israel) about $72 million to reacquire exclusive, worldwide rights to commercialize DiaPep277 (see BioCentury, March 3 & April 28). ...