The FDA's data shows that only about 7% of drugs that enter phase 1 clinical trials will make it all the way to market. Those are terrible odds, and each year, biotech investors have to watch as some of the most promising and exciting compounds go down in flames.
Here's a look back at seven of the biggest pipeline blowups of 2016.
1. Alnylam Pharmaceuticals (NASDAQ:ALNY) -- Revusiran
RNAi specialist Alnylam shocked the markets in October when it announced that it was discontinuing development of revusiran, one of the company's most advanced compounds that held promise to treat hereditary ATTR amyloidosis with cardiomyopathy. The decision was made when an unblinded review of the trial "revealed an imbalance of mortality in the revusiran arm, as compared to placebo." That implies that the benefits of using the drug do not outweigh the risks.
This news was a huge blow to investors, and it raises new questions about the rest of the company's pipeline. Alnylam has created a number of interesting drugs based on its gene-silencing RNAi expertise, so if this technology proves to be too unsafe to be used in real-world applications, then it's possible that its other product candidates could go on to suffer a similar fate.
2. Clovis Oncology (NASDAQ:CLVS) -- Rociletinib
Cancer-focused Clovis was flying high in 2015 over excitement for rociletinib, a hopeful treatment for lung cancer. However, shares were walloped earlier this year when new data came in from the drug's clinical trials that showed that rociletinib's projected response rate was too high. That caused the FDA's advisory committee to vote 12-to-1 against an approval recommendation.
The agency later notified Clovis that it had decided to follow the committee's recommendation. In response, Clovis decided to stop all future clinical development of the drug and withdrew its regulatory application in Europe.
The company's future success is now completely in the hands of rucaparib, a PARP inhibitor that is a hopeful treatment for ovarian cancer.
3. Celldex Therapeutics (NASDAQ: CLDX) -- Rintega
Rintega was another promising product candidate that had captured the market's attention. This experimental cancer vaccine looked quite promising in early clinical trials as a hopeful treatment for the brain cancer glioblastoma.
Unfortunately, phase 3 data showed that rintega failed to improve upon overall survival rates when compared to the control group. Management abandoned the drug soon after, sending shares in a tailspin. Celldex has since shifted its focus to glembatumumab vedotin, a potential treatment for breast cancer.
4. Eli Lilly (NYSE:LLY) -- Solanezumab
History shows that developing new treatments for Alzheimer's disease has been incredibly difficult, and investors were reminded of that just weeks ago after another high-profile treatment bit the dust.
In late November, pharma giant Eli Lilly reported data from its EXPEDITION3 trial, which was testing solanezumab as a treatment for mild dementia due to Alzheimer's disease. Unfortunately, data from the trial showed that solanezumab did not demonstrate a statistically significant slowing of cognitive decline when compared to the placebo group.
Shares tumbled on the news, and Lilly has since abandoned its plans to seek regulatory submission.
5. Novavax (NASDAQ: NVAX) -- RSV F
Vaccine developer Novavax had some difficult news to share with investors in mid-September. The company reported top-line data from its Phase 3 RESOLVE trial, testing the company's hopeful respiratory syncytial virus (RSV) vaccine in older adults. Unfortunately, data from the trial showed that the placebo modestly outperformed the company's RSV F vaccine.
Shares cratered, falling by 85% in a single day. Nonetheless, Novavax is still a believer in the drug and is moving forward with trials that are testing the vaccine's use in infants via maternal immunization.
6. Arrowhead Pharmaceuticals (NASDAQ:ARWR) -- ARC-520, ARC-521, and ARC-AAT
Arrowhead dropped a bombshell on investors in late November when it announced that it was going to discontinue development of three of its most promising pipeline candidates. Management stated that the decision was made in response to the FDA placing a clinical hold on the company's Heparc-2004 study, which was researching ARC-520 as a potential cure for hepatitis B. The hold was ordered so that Arrowhead could provide answers related to liver toxicology issued on EX1, the company's intravenously administered delivery vehicle.
Management stated that it would take quite a long time to gather all of the necessary clinical data, and even then the company still faced long odds of success. As a result, they decided to cancel all development of drugs that used EX1 as a delivery vehicle, which included ARC-520, ARC-521, and ARC-AAT.
7. BioMarin Pharmaceuticals (NASDAQ:BMRN) -- Drisapersen
In 2014, BioMarin ponied up $680 million to acquire Prosensa Holding to get its hands on drisapersen, a hopeful treatment for Duchenne muscular dystrophy (DMD). The move put BioMarin, Sarepta Therapeutics, and PTC Therapeutics in a race to be the first to bring a treatment for this rare muscle-wasting disease to market.
However, time would later prove that BioMarin had backed the wrong horse. The FDA's advisory committee raised some big concerns about drisapersen's efficacy, leading the agency to reject the drug outright in January. BioMarin withdrew its application in Europe a few weeks later and decided to halt all future development completely.
BioMarin's failure left the door wide open for Sarepta Therapeutics. While Sarepta's drug eteplirsen also had issues of its own, the FDA went on to give the drug the green light just a few months later.