Hepion reports restructuring and resignations; Brookline downgrades to hold and suspends target

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Hepion Pharmaceuticals (NASDAQ:HEPA) announced a restructuring that, among other things, will suspend the enrollment of new patients in the Phase 2b ‘ASCEND-NASH’ clinical trial of its lead drug candidate, rencofilstat, until the study is fully funded or Hepion enters into a strategic transaction.

Earlier this year, Hepion announced that its Phase 2 ‘ALTITUDE-NASH’ trial of rencofilstat achieved its primary and secondary endpoints; and just a few weeks ago, the company presented positive new data from ALTITUDE-NASH demonstrating that 17 weeks of rencofilstat treatment significantly reduced liver stiffness in study subjects.

Robert Foster, PharmD, PhD, resigned as Hepion’s CEO and director for “personal reasons”; the company’s CFO, John Cavan, has been appointed interim CEO.

Dr. Foster joined Hepion as CSO in May 2016, when Hepion merged with Dr. Foster’s privately held company, Ciclofilin Pharmaceuticals, where Dr. Foster and his clinical team discovered rencofilstat. He was appointed CEO of Hepion in October 2018.

In a statement, Dr. Foster said, “I sincerely enjoyed my tenure with the company over the past years. We put our hearts and souls into bringing rencofilstat into the ongoing Phase 2b clinical trials in NASH, and I wish the very best for the continued successes of the company’s development program.”

Separately in an 8-K filed this morning, Hepion disclosed that Peter LJ Wijngaard, PhD, also resigned from the company’s board of directors on the same day as Dr. Foster. No reason for Dr. Wijngaard’s resignation was cited in the filing.

Based on today’s news, Brookline Capital Markets downgraded Hepion to “hold” from “buy” and suspended its target price. In a research note, analyst Kemp Dolliver writes that “these developments are very concerning, particularly coming on the heels of promising data from the ALTITUDE-NASH and earlier trials. Completion of the Phase 2b ASCEND-NASH trial is critical to the NASH program, and the enrollment pause increases the risk of failure.”