UPDATE: Now includes comment from CEO Adam Gridley

Histogenics (NSDQ:HSGX) said today that a pivotal trial of its regenerative NeoCart knee treatment failed to meet its primary endpoint, sending its share price down some -70%.

Waltham, Mass.-based Histogenics said NeoCart, which is designed to repair knee cartilage damage using cells harvested from the surface of patients’ femur, missed the study’s primary endpoint of statistically significant improvement in pain and function at one year compared with micro-fracture.

The prospective, randomized study used the Knee Injury & Osteoarthritis Outcomes Score and the International Knee Documentation Committee score for the main endpoint of at least a 12-point improvement in the KOOS pain sub-score assessment and a 20-point improvement in the IKDC subjective assessment.

In the intention-to-treat analysis, 121 of 170 patients in the NeoCart arm, or 71.2%, showed a positive response, compared with 49 of 79 or 62.0% of the control arm.

The news sent HSGX shares down -72.2% to 77¢ apiece today in early trading.

Despite the missed primary endpoint, CEO Adam Gridley said that he’s still optimistic about the future of the NeoCart knee treatment, and the data that came from the trial.

“We’re quite proud of completing the single biggest trial enrolled prospectively with the FDA’s guidelines, which are pretty narrowly defined for these knee cartilage treatments. We ran a really solid trial. We also had a very, very tough dual threshold responder analysis. We literally missed by about two patients, and the totality of that dual threshold data also showed clinically meaningful responses, both early and sustained for NeoCart,” Gridley told MassDevice.com “We’re walking away both proud and optimistic, and the feedback from our surgeons and patients continues to be fantastic.”

Gridley said that Histogenics will continue to work with the FDA, and that he expects they will have a meeting with the company within, roughly, the next 30 days.

“It’s full speed ahead for us. We had originally planned on a [Biologics License Application] at the end of this year or early 2019. I think based on this data, we still have those plans, and we’re trying to bring the product to market in early 2020 as originally anticipated. So, we have a lot of work to do, but we’ll work closely with the agency to make sure we’re aligned,” Gridley said.

Gridley didn’t downplay the impact of the missed endpoint, but did say that the company designed the trials a decade prior, and suggested that the endpoint was “a step above anything that has been tried in orthopedics.”

“Now, we designed this, so we own this, but we designed this 10 years ago when there was a lot of uncertainty on what was the best way to run pain and function trials in knee cartilage. It was a very different spot from a regulatory perspective,” Gridley said. “I think it was a great design, but I think it’s two or three logarithmic steps above what the FDA now, 10 years later, is requiring for approval.”

Gridley said that he is optimistic that the NeoCart treatment will be an overall improvement upon the current standard of care, micro-fracture, and that Neocart has the potential to be a great benefit to the average patient.

He also offered that surgeons involved with the NeoCart system in the trial continue to laud the system and the results they’ve seen from it in their patients.

“May of the surgeons in both our phase two and phase three trials are calling us saying ‘my patients are thrilled – they got their life back, they got it back earlier, and they’re doing things that they couldn’t do before,’” Gridley said. “This is all about the patient. They’re all looking for better alternatives, and over half of the patients that get these injuries just don’t do anything because when they see micro-fracture is the option, they say ‘I’m better off just waiting and getting OA’.”

“We are pleased with the overall performance of NeoCart in this Phase 3 clinical trial and the data confirm the feedback we have received from several of the investigators who participated in the trial. Most importantly, patients treated with NeoCart displayed an early and sustained recovery from pain and return to function that was clinically meaningful. The data from this trial are also consistent with results seen in prior clinical trials of NeoCart as well as the biomechanical data generated as part of our collaboration with Cornell University,” added chief medical officer Dr. Lynne Kelley. “While we are continuing to analyze the data, we have already seen a number of important results, including a statistically significant improvement of NeoCart compared to micro-fracture in lesion sizes of greater than 2cm and patients with higher body mass index. We think that results such as these will be an important part of our planned discussions with the FDA, as well as with clinicians if NeoCart is approved.”