Shares in Neurochem Inc., one of Canada's top biotech developers, plummeted Monday after it revealed that data from a key clinical trial that confirmed what many analysts have speculated for months: that Alzhemed, its would-be blockbuster drug aimed at slowing the onset of Alzheimer's Disease, is a dud.
Neurochem stock was trading for $3.92, down 33% from Friday's close, at 12:39 p.m. after the company said results from its North American Phase three trial -- which measures the efficacy of a drug -- "did not demonstrate a statistically significant difference" on patients with mild to moderate Alzheimer's, compared to those in a control group who took a placebo.
But while the company hoped another go at analyzing data that was difficult to assess based on complications with statistical measurements of the study, the U.S. Food and Drug Administration turned down the company's proposals to do further analysis, Neurochem said in a release.
The company, headed by Canada's best-known biotech entrepreneur, Dr. Francesco Bellini, still hopes to modify its study design for ongoing Phase three trials in Europe.
The poor results came as little surprise to analysts, who have long doubted the prospect for Alzhemed as well as the company's other drug in development, Kiacta, a treatment for kidney problems.
"We believe the North American results are a significant setback for the company," RBC Capital Markets analyst Philippa Flint said in a research note. She had already assumed the drug would fail and said the stock was worth the company's cash on hand, or $1.50 per share, and advised investors to "sell their shares as we see no major milestones facing the company" until results from Europe are announced, in about two years.
