Skye Bioscience Halts Eye Disease R&D After Glaucoma Drug Fails Phase 2

Skye Bioscience experienced a significant drop in its share price during pre-market trading on Monday after announcing a strategic shift following the failure of a phase 2 trial. The company's stock plummeted by 28% to $7.90 at 8:15 a.m. ET, a sharp decline from the previous Friday's closing price of $10.94. This drop was triggered by the revelation that Skye's leading asset, SBI-100, did not achieve a statistically significant reduction in intraocular pressure during a mid-stage trial involving 56 patients suffering from primary open-angle glaucoma or ocular hypertension.

As of April, Skye had been optimistic about the prospects of SBI-100, crediting its advancement into phase 2 trials as a key factor in the company's ability to transition its shares from the over-the-counter market to the Nasdaq Global Market. However, the disappointing results from the phase 2 trial have prompted Skye to not only cease all activities related to SBI-100 but also to completely abandon its ophthalmology research and development efforts. Moving forward, Skye will redirect all its resources towards its metabolic program, which is led by the CB1 inhibitor nimacimab.

Nimacimab is set to enter phase 2 trials for obesity, with dosing expected to commence in the third quarter. Skye believes that this strategic pivot will extend its operational runway through to 2027. Over the past year, the company has been laying the groundwork for its metabolic program, with a focus on diversifying its product portfolio to target various disease mechanisms.

CEO Punit Dhillon elaborated on the company's new direction in a June 10 press release, stating that Skye will concentrate all its efforts on expanding its metabolic clinical pipeline. Dhillon emphasized that the unique mechanism of peripheral CB1 inhibition by nimacimab could potentially offer better quality, sustainable weight loss solutions and improved treatments for co-morbid conditions in an anti-obesity therapeutic landscape that heavily favors incretin-based treatments.

Dhillon further expressed optimism about sharing updates on the clinical program and advancing nimacimab through data collection by 2025. Inhibiting CB1 has shown promise in addressing a broad array of diseases with significant unmet medical needs, including obesity, chronic kidney disease, and metabolic dysfunction-associated steatohepatitis (MASH).

Despite the potential of CB1 inhibition, the modality has faced challenges in the past. CB1 agonists, in particular, have had a troubled history, most notably illustrated by the failure of Sanofi and Aventis' obesity drug Acomplia. The drug was withdrawn from European markets in 2008 due to its association with depression and suicidal thoughts.

In summary, Skye Bioscience is undergoing a major strategic overhaul following the unsuccessful phase 2 trial of SBI-100. The company is shifting its focus entirely to its metabolic program, spearheaded by nimacimab, with the intent of addressing a range of diseases and extending its operational horizon. This pivot reflects Skye’s commitment to diversifying its clinical pipeline and targeting high-need medical conditions, despite the historical challenges associated with CB1 modulation.