Masitinib trial insurance offers a safety net for ALS research
Developer AB Science will be reimbursed if study is not successful
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- Masitinib is an experimental oral therapy for ALS that's aimed at slowing disease progression.
- AB Science secured insurance for its Phase 3 masitinib trial to mitigate the financial risks of potential failure.
- This insurance covers up to €39M if the trial is unsuccessful.
As part of preparations for a Phase 3 clinical trial to test its experimental therapy, masitinib, in people with amyotrophic lateral sclerosis (ALS), AB Science has purchased a unique insurance policy.
This type of insurance — called clinical trial funding insurance, or CTFI — is a specialized financial product that would essentially reimburse AB Science for costs if the upcoming Phase 3 AB23005 trial (NCT07174492) is unsuccessful for predefined reasons.
Phase 3 trials like this usually cost millions to conduct and can fail for several reasons, making them risky from a financial perspective. Alain Moussy, CEO and co-founder of AB Science, noted in a company press release that ALS “is considered one of the riskiest indications in the industry.” The insurance will significantly reduce the risk to masitinib’s development in ALS, the company said.
Two possible outcomes with this type of insurance
According to AB, with this insurance, there are essentially two possible outcomes from the upcoming masitinib trial. In one scenario, the study is successful, recruiting all patients and meeting its main goal of demonstrating that masitinib is superior to placebo in slowing a standard measure of disease progression. In that case, AB expects to seek regulatory approvals and eventually bring the therapy to market. It would then be able to recoup the costs of running the trial, as well as the insurance premium, through drug sales.
In the other scenario, the trial is not successful — that might mean the study is run to completion but fails to show that masitinib is any better than a placebo. This scenario also includes technical issues that may prevent the trial from running successfully, such as problems recruiting enough patients or unexpected supply chain disruptions. The trial would also be deemed unsuccessful if there are unacceptable safety issues or if a regulatory agency places the trial on hold or terminates it.
If the trial fails, the CTFI would kick in and reimburse AB Science for the costs it has incurred on the trial. Depending on the specific scenario, this could cover up to €39 million (just over $42 million). AB Science did not disclose the cost of the premium for the CTFI.
“AB Science is very proud to be one of the first companies in the world to benefit from this CTFI for a [Phase 3] in ALS,” Moussy said. Because insurance companies lose money if they have to pay out, Moussy noted that this coverage “is a mark of confidence in the probability of success of the masitinib program in ALS.”
Trial halted while AB Science secured insurance
The CTFI was purchased from the financial company Medical & Commercial International (MCI).
“We are thrilled to be able to support global drug development and facilitate lending through insurance,” said James Banks, co-founder of MCI. “This approach helps companies raise capital and reduce equity dilution through downside protection, leaving greater control and ownership in the hands of the innovator. AB Science has a truly exciting asset that has the potential to materially slow disease progression in ALS patients. Through extensive underwriting assessment on safety, efficacy, and feasibility, we are proud to be able to support AB Science in their mission.”
AB Science paused patient recruitment and other clinical trial activities in Europe while it secured insurance and continued discussions with regulatory authorities. Because the upcoming Phase 3 trial has not yet begun recruiting patients, the company noted that this decision has “no material impact” on the study.
Masitinib is an oral therapy that’s designed to dampen inflammation in the nervous system, which is believed to contribute to the progression of ALS. The upcoming Phase 3 trial builds on an earlier Phase 2/3 study (NCT02588677), in which add-on masitinib treatment slowed disease progression by approximately 27%, with greater effects observed in patients with mild or moderate disease activity.
This will be the second Phase 3 trial of masitinib for ALS launched by AB Science. The company had previously initiated a different Phase 3 trial, AB19001 (NCT03127267), but it was terminated early due to recruitment issues.
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