Item 8.01 Other Events.
As previously planned, the first of two planned Sample Size Reestimations (SSR1) of the Phase 3 URIROX-2 Trial for the development of reloxaliase for patients with enteric hyperoxaluria has been conducted by an independent data safety monitoring board (DSMB) statistician. SSR1 is designed to assess the effect of reloxaliase vs. placebo on the reduction of urinary oxalate (UOx) levels over the first 28 days of the trial, the primary endpoint to support a potential accelerated approval filing. The trial has been initially sized at 200 subjects, which would provide more than 90% power for the primary UOx endpoint based on an assumption of a 15% greater effect size of reloxaliase over placebo. The DSMB was provided with data for the first 78 subjects enrolled in the trial. Based on the results of its unblinded analysis, the DSMB has recommended that the trial size be increased from the initial 200 subjects to the maximum allowed number of 400 subjects under the pre-specified rules. However, even with this maximum recommended sample size increase, the power to detect an effect of reloxaliase vs. placebo would still be less than 80% based on the available data. Based upon this recommendation, the company believes that the separation between the reloxaliase and placebo groups for the UOx primary endpoint is lower than expected, and therefore that the likelihood of success for the long term endpoint of reduction in kidney stone disease progression is also lower than expected. As such, the company has decided to terminate the URIROX-2 study and plans to promptly initiate the process of closing the study with the CRO, investigative sites, patients, and business partners. The company thanks the patients, investigative sites, clinical investigators and their staffs for their participation in this study. No further clinical studies of reloxaliase are planned at this time.
Subject to reaching agreement on satisfactory payment terms with the contract research organization assisting in the conduct of the trial, the company intends to continue its second clinical program ALLN-346, in Phase 2a development with FDA Fast-Track designation for the treatment of hyperuricemia in patients with gout and chronic kidney disease. We are currently enrolling patients in two Phase 2a studies for the program: Study 201, a 7-day inpatient study in patients with hyperuricemia, and Study 202, a 14-day outpatient study in patients with hyperurcemia, gout, and chronic kidney disease. However, the company has limited financial resources, and there can be no assurance that these trials will be completed, or if completed, that they will be successful.
As previously disclosed, the company is pursuing a process to explore a range of strategic and financing alternatives to maximize shareholder value and has engaged the investment bank Stifel, Nicolaus & Company, Incorporated (“Stifel”) to act as a strategic advisor for this process. As a result of the company’s decision to terminate the development of reloxaliase, the company and Stifel now plan to focus their efforts on ALLN-346. However, there can be no assurance that this strategic review process will result in the Company pursuing any transaction or that any transaction, if pursued, will be completed. The Company has not set a timetable for completion of this strategic review process, and the Company does not intend to comment further unless or until its Board of Directors has approved a definitive course of action, the review process is concluded, or it is determined other disclosure is appropriate.
Of note, the failure to obtain sufficient additional funds on commercially acceptable terms to fund the company’s operations may have a material adverse effect on the company’s business, results of operations and financial condition and jeopardize the company’s ability to continue operations in the near-term. The company will likely need to consider additional cost reduction strategies, which may include, among others, amending, delaying, limiting, reducing, or terminating the development program for ALLN-346, and the company may need to seek an in-court or out-of-court restructuring of its liabilities. In the event of such future bankruptcy proceeding, holders of the company’s common stock and other securities will likely suffer a total loss of their investment.