AB Science struggles to break out as canine cancer drug flounders

French biotech company AB Science has been studying its lead compound, masitinib, for a dozen years, but so far it has only won approval to market the compound to treat dogs with cancer in the U.S. and Europe. Along the way, investors have pounded the company for dashing their hopes: AB's market value has been slashed nearly in half since its 2012 high of $1 billion.

Now the company is reaching for vindication, as it prepares to release results from a late-stage trial of the drug in people with the rare immune disorder mastocytosis in September. But AB has plenty of critics questioning its unusally aggressive research plan, which includes about 24 clinical trials underway in Europe in multiple diseases--far more than its closest rivals--according to a profile of the company in Bloomberg.

The FDA conditionally approved masitinib, sold under the trade name Kinavet CA-1, in 2011 to treat a type of skin cancer in dogs known as mast cell tumors. The drug is a tyrosine kinase inhibitor, part of a class of medicines that has proven successful in human oncology treatment. Still, Kinavet has faced stiff competition from Zoetis ($ZTS), which was first to market with its tyrosine kinase inhibitor to treat mast cell tumors, Palladia.

And sales of masitinib don't seem to be doing much to help fund AB Science's massive R&D program. The company's cash reserves fell from €26.9 million ($30.2 million) in 2013 to €13.2 million ($15 million) at the end of 2014. AB raised €8 million ($9 million) in a February stock sale, but its operating expenses have doubled to €17.3 million ($19.4 million) since 2009, according to Bloomberg.

What's more, the FDA hasn't exactly gone easy on AB. Last April, the agency fired off a warning letter to the company, alleging that the company was improperly marketing Kinavet for unapproved uses, such as treating allergic conditions in dogs and cats. The agency cited several examples of inappropriate marketing language, such as this nugget it found on the website for Kinavet: "Off-label use of Kinavet-CA1 has again revealed some interesting case studies. These include encouraging results in asthmatic cats." The company has since revised the website, which now indicates that the drug is in trials for treating "other conditions."

As for its efforts in human medicine, AB has faced plenty of pushback from patient advocacy groups and regulators. The European Medicines Agency has so far refused to approve masitinib for the treatment of gastrointestinal and pancreatic cancer, citing a lack of compelling efficacy and safety data. One patient group lashed out at the company for exaggerating the drug's scientific value and giving "unreasonable hopes" to patients, according to Bloomberg. And in 2012, France barred the company from conducting clinical trials in Alzheimer's disease, asthma, and chronic obstructive pulmonary disease, though reasons for that action were not provided.

AB's CEO, Alain Moussy, declined to be interviewed for the Bloomberg piece, but that was anything but a sign of pessimism on his part. As the news organization points out, Moussy--whose family has a history of mastocytosis--doesn't appear to have sold a single share of his company. He held onto his 41% stake, passing up the opportunity to sell even when AB's shares skyrocketed a few years back.

- here's the Bloomberg story
- access the FDA's warning letter here