Neuphoria's Social Anxiety Drug Fails Phase III Trial, Prompting Strategic Review

Neuphoria Therapeutics faced a significant setback as its lead candidate for social anxiety disorder (SAD) failed to meet primary and secondary endpoints in a late-stage clinical trial. The company has announced the discontinuation of its SAD program and initiated a strategic review to conserve cash and maximize shareholder value.

Phase III AFFIRM-1 Trial Results

The phase III AFFIRM-1 trial evaluated BNC210 (soclenicant), an α7 nicotinic receptor negative alteration modulator, as an acute treatment for social anxiety disorder. A single 225-mg dose of BNC210 was tested against placebo in a double-blind study. The trial's primary endpoint measured change from baseline on an industry "distress scale" during a public speaking challenge.

Results showed that BNC210 failed to improve self-reported measures of distress during the public speaking challenge. The trial also missed its secondary endpoints, which included two other self-reported scales of symptoms and a clinician-scored test of patients' global functioning.

Despite the disappointing efficacy results, Neuphoria reported that the safety and tolerability profile of BNC210 remained favorable. The company had previously touted the candidate as providing rapid stress relief without common side effects associated with currently approved treatments, such as sedation or cognitive impairment.

Strategic Review and Future Plans

In response to the trial failure, Neuphoria CEO Spyros Papapetropoulos announced immediate action to conserve the company's cash position. The company will halt further investment in its programs and conduct a strategic review to evaluate all options for Neuphoria's path forward.

While the SAD program has been discontinued, Neuphoria plans to assess next steps for BNC210 in post-traumatic stress disorder (PTSD). The company cited "previous positive data with chronic daily dosing" as a rationale for continuing PTSD research. In December 2024, Neuphoria reported positive effects on PTSD symptoms at 12 weeks in a phase IIb trial, with indications of efficacy even within four weeks.

Neuphoria expects to provide an update on its strategic review by the end of this year. As of June 30, the company had $14.2 million in cash and cash equivalents, projected to fund operations through the second fiscal quarter of 2027.

Market Impact and Industry Outlook

The news of BNC210's failure in the AFFIRM-1 trial had an immediate and severe impact on Neuphoria's stock price, which plummeted 67% following the announcement. Shares dropped from Monday's close of $15.40 to $5 by 10 a.m. ET the following day.

William Blair analysts questioned the trial's design and the pharmacokinetics of the drug, noting that Phase I data showed BNC210 at a 300mg dose takes 2 hours in a fasted state to achieve maximum plasma concentration, yet the public speaking challenge was conducted 60 minutes after taking either active drug or placebo.

The failure of Neuphoria's SAD program leaves VistaGen as the only other company running pivotal-stage clinical trials for social anxiety disorder. VistaGen is currently testing an inhaled pherine spray, fasedienol, with data from the phase III PALISADE-3 trial expected to read out this quarter. The different mechanism of action and delivery method of fasedienol could potentially differentiate it from BNC210.

Despite the setback in its SAD program, Neuphoria maintains active partnerships in other areas. The company has an ongoing collaboration with Merck & Co. to advance two positive allosteric modulator candidates, with one currently in a Merck-led phase 2 study for Alzheimer's disease. This partnership could potentially yield up to $450 million in milestone payments for Neuphoria. Additionally, the company has a deal with Carina Biotech to develop a legacy oncology program.