Contineum Therapeutics, Inc.

Contineum Therapeutics reported a Phase 2 failure in multiple sclerosis on Thursday afternoon, but most analysts don’t seem to view the miss as catastrophic. Contineum said its drug PIPE-307 did not reach its primary or secondary endpoints in a trial looking at patients with relapsing-remitting multiple sclerosis. The San Diego biotech did not report specific data and said it plans to release the full results at a future medical conference. Contineum’s stock price $CTNM was down about 9% in Friday’s premarket session. Analysts largely agreed, however, that the study was high-risk and unlikely to succeed. Contineum’s best bet for approval lies in another program called PIPE-791, which is being studied for idiopathic pulmonary fibrosis. A Phase 2 study is expected to launch by the end of this year. “We continue to view the lion’s share of value for Contineum in the development of the company’s LPAR1 antagonist PIPE-791,” William Blair analyst Myles Minter wrote in a note to investors. Contineum, formerly known as Pipeline Therapeutics, was put together by Versant Ventures in 2018 and went public last year with a $110 million IPO. It’s partnered with Johnson & Johnson on PIPE-307, and the pair is also studying how well the drug works in major depression. A Phase 2 study is expected to read out in mid-2026. Minter wrote he doesn’t expect the multiple sclerosis failure to impact the depression readout, but it’s still a risky bet to succeed. PIPE-307 is an M1 muscarinic receptor antagonist, targeting one of the same pathways used in the new schizophrenia drug Cobenfy from Bristol Myers Squibb and Karuna Therapeutics. While Cobenfy agonizes the M1 receptor (as well as the M4 receptor), PIPE-307 is designed to work in the opposite direction and inhibit its activity.

iStock, doit While expressing disappointment, William Blair analysts were unsurprised by the Phase II failure, having assigned the VISTA study a high level of risk given the “mixed” performance of a similar drug in a prior multiple sclerosis study. Johnson & Johnson and Contineum Therapeutics’ PIPE-307, an investigational M1 muscarinic receptor agonist, failed to significantly improve vision outcomes in patients with a specific type of multiple sclerosis. Without providing specific data, the partners revealed in a statement on Thursday that at two tested doses, the drug candidate “did not meet its prespecified primary or secondary efficacy endpoints.” In particular, PIPE-307 was unable to significantly improve binocular 2.5% low contrast letter acuity, a test that measures visual acuity at low contrast, in patients with relapsing-remitting multiple sclerosis (RRMS). J&J and Contineum continue “to interrogate the trial data” and the study’s exploratory endpoints and intend to present the full analysis at a future scientific congress. Contineum stock dropped about 20% in after-hours trading, hitting a low of $9.78 per share versus its previous $12.22 closing price on Thursday. Reacting to the announcement, William Blair told investors that while its analysts are “disappointed” by the readout, “we had always viewed the study as risky, given clemastine’s mixed data in prior studies on the low contrast letter acuity metric.” Like PIPE-307, clemastine is an M1 muscarinic receptor agonist. In March last year, a study arm of the Phase I/II TRAP-MS study , led by the National Institute of Allergy and Infectious Diseases, was halted after investigators detected signals of accelerating accumulation of disability in treated patients. As for safety, J&J and Contineum on Thursday said that PIPE-307 had an “acceptable” pro both tested doses. J&J and Contineum partnered in April 2023 (when Contineum was still called Pipeline Therapeutics), with the pharma fronting $50 million to collaboratively develop PIPE-307 in nervous system disorders. If all milestones are met, Contineum could receive around an additional $1 billion, plus royalties if the drug reaches the market. The partnership is ongoing despite Thursday’s failure. J&J continues to study PIPE-307, also dubbed JNJ-89495120, for major depressive disorder (MDD). Through its Janssen subsidiary, the pharma is running the Phase II Moonlight-1 study in this indication, which is currently enrolling patients and has a primary completion date in June 2026. “We see little read-through from the RRMS indication to MDD, but we acknowledge that study also remains risky,” William Blair wrote on Thursday, noting that “placebo responses [in MDD studies] have eroded effect sizes.” Patient heterogeneity, the analysts added, “can lead to volatility in patient response rates.” Topline data from Moonlight 1 are expected mid-2026.

Contineum Therapeutics, a San Diego-based biotechnology company, disclosed Thursday that its most advanced experimental drug has failed as a multiple sclerosis treatment in a mid-stage clinical trial.The study compared two different doses of Contineums drug, code-named PIPE-307, to a placebo against the most common, relapsing-remitting form of MS. Though both doses showed acceptable safety and tolerability, they had no significant impact on the trials main measure: a vision test that tasks participants to read faint letters. Blurry or impaired eyesight is often one of the first noticeable symptoms of MS.PIPE-307 also missed the trials so-called secondary endpoints. In a statement, Contineum said it will continue to analyze data from exploratory study ojectives, and plans to present the full results at a medical meeting as well as publish them in a peer-reviewed journal. The company remains committed to finding new therapies for inflammatory and fibrotic diseases, according to Chief Medical Officer and head of development Timothy Watkins.While we are disappointed by the result, we had always viewed the study as risky, wrote Myles Minter, an analyst at the investment firm William Blair, in a note to clients.Contineum shares fell more than 12% in after-hours trading Thursday, to hover around $12.20 apiece.The biotech formed in 2017 under the name Pipeline Therapeutics. It secured $30 million in late 2019 from a Series B fundraising round that saw participation from a handful of backers, including its founding investor, Versant Ventures. Less than two years later, Contineum closed an $80 million Series C round. The company then brought in $110 million by going public in 2024.Contineum came to the Nasdaq in the midst of a historical downturn in biotech stocks. For the past year, its shares traded below their $16 debut price.The company has two drugs in human testing. One, PIPE-791, is in early-stage trials for chronic pain, progressive MS and a lung disease known as IPF. To Minter, PIPE-791 is responsible for the lions share of Contineums value, and the way it works by blocking LPAR1, a multifunctional receptor protein is an exciting approach to treating IPF. A few other developers, including Bristol Myers Squibb, are pursuing similar programs.PIPE-307, meanwhile, is designed to inhibit M1 one member of a protein family that regulates the nervous system and, research suggests, might also help control parts of the immune system. In MS, the immune system mistakenly attacks the protective coatings that surround nerve cells, leading to a variety of sensory, mobility and cognitive issues. A study published this year in the journal Molecular Pharmacology describes how M1 may impede the body from repairing these coatings.Notably, Cobenfy, a Bristol Myers drug that was recently approved to treat schizophrenia, amplifies both M1 and a related protein, M4.Researchers are also investigating whether PIPE-307 can be useful treating major depression. Minter wrote that he sees little read-through from the failed MS trial to an ongoing depression study, though the latter is still risky. The William Blair team estimates a 35% probability of success.PIPE-307 has attracted interest from one of the worlds largest pharmaceutical firms, Johnson & Johnson, which in 2023 paid $50 million for an exclusive, worldwide license to study, develop and commercialize it. '