Morphic’s EMERALD-1 trial for ulcerative colitis disappoints

Investors have raised a concern about Morphic’s eagerly awaited EMERALD-1 trial. Despite experiencing an initial surge in stock values following the release of promising preliminary results, the biotechnology company has now presented an in-depth analysis concerning its oral treatment for ulcerative colitis. This unveiling has resulted in a significant decline in stock prices, effectively nullifying the earlier gains.

The data originates from a phase 2a trial that was open-label and single-armed, involving 35 adults grappling with moderately to severely active ulcerative colitis. These individuals were administered MORF-057, an oral inhibitor targeting α4β7. Initially, back in April, Morphic disclosed that 25.7% of the participants achieved clinical remission after 12 weeks of taking the medication twice daily. This revelation implied comparable effectiveness to Takeda’s injectable anti-α4β7 monoclonal antibody, Entyvio.

However, Morphic has since presented additional data that raises doubts about how MORF-057 measures up against Entyvio and other treatments for ulcerative colitis. This extended dataset was unveiled at the United European Gastroenterology Week held in Copenhagen and included assessing the rate of endoscopic improvement. At the 12-week mark, only 25.7% of patients displayed signs of endoscopic improvement, a rate lower than anticipated based on outcomes from other ulcerative colitis trials, where endoscopic improvement typically surpasses the rates of clinical remission.

In Takeda’s phase 3 trial, the rates of clinical remission and endoscopic improvement were 31.3% and 39.7%, respectively, at week 52. Similar patterns were observed in trials involving AbbVie’s Humira and Protagonist’s oral α4β7 antagonist, despite encountering their respective challenges. Morphic’s results, juxtaposing a relatively small, single-arm study against Takeda’s extensive controlled trial, may inadvertently present a misleading perception of efficacy. Given Morphic’s past performance, a higher rate of endoscopic improvement than the reported 25.7% was initially anticipated.

Just before the data publication, investors reacted by causing a 29% reduction in Morphic’s share price, causing it to plummet to $36.68. This downturn effectively negated the gains that had followed the initial release of the preliminary data in April. The stock, which had fluctuated between $34 and $38 in anticipation of the data release, had surged beyond $60 in the weeks following the initial announcement in April.

Responding to these unfolding events, a randomized, double-blind, placebo-controlled phase 2b trial of MORF-057 is already underway. This trial, scheduled to conclude its primary endpoint analysis in the first half of 2025, is anticipated to offer a clearer understanding of whether MORF-057 genuinely poses a strong challenge in the ulcerative colitis market.

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