The FDA put Regulus Therapeutics $RGLS lead drug RG-101 on a clinical hold (verbally communicated to RGLS, formal letter within 30 days) because of a second reported case of jaundice from its ongoing phase 2 trial in HCV. I just spent 34 minutes listening to the entire webcast from RGLS, and here's what I have.

Regulus FDA Hold

The particular patient had a long medical history - prior open heart surgery, other medications for blood pressure, insulin, statin therapy. He was also in dialysis for end-stage renal disease. He was in hospital for 3 days for elevated bilirubin (indication for jaundice), has recovered completely, completed his treatment, and has achieved HCV RNA BLOQ. The bilirubin elevation was detected 117 days after dosing of RG-101.

As to RG-101’s pk/pd (how long the drug remains in the body etc): RG-101 reaches C—max (max concentration) in 6-8 hrs, and is gone from bloodstream in 24 hours. Its half life in liver is 2 weeks. So there must have been very, very low drug concentration at 117 days, or almost 16 weeks later, which is about 4, 5 half lifes later. Also noteworthy that the oligo-class drugs like RG-101 are more inert in drug-drug interactions than many other drugs.

Also note that, in all 4- levels animal studies of RG-101, there has never been any bilirubin elevation, even at much higher doses. In human trials, in all there were 200 subjects, 2 SAEs, 1%. In other HCV programs, considering their data for rates with change in clinically significant levels of bilirubin, RG-101 is consistent with other trials.

The 1st patient with jaundice had a history of alcohol abuse, poor diabetes requiring insulin, plus HCV.

Not even in other microRA studies was there any hint of elevated bilirubin. Both patients were also on other drugs which could lead to hepatotoxicity.

Moreover, the FDA walks very cautiously around drug-related liver injury issues, and its guidelines call for a lot of care. This was very possibly a normal, routine hold requiring more data. This is all that the webcast said.

Considering all this, it seems unlikely that the SAEs were TEAEs, or that the serious adverse  events were treatment-related.

If RGLS is asked to identify the mechanism by which bilirubin elevation was achieved in these 2 patients, that would be difficult. It would be like telling a defendant - well, seems like you didn’t do it, but we won’t let you go until you can figure out who did do it.

Other than that possibility, this seems like a good opportunity to load up on a stock that’s down 60% on this news.

Recall our original thesis on RG-101 -

Nothing has changed with that thesis because of this incident, which seems to have worked only to temporarily bring down the stock. It is my opinion that unless we get more patients with jaundice or other hepatic SAEs, everything is on track, especially since RGLS completed dosing in all the ongoing trials, and are simply waiting for results. Phase 2 is supposed to be initiated early 2017, by which time this should be resolved one way or another.