UPDATE 1-Nuvelo says drug fails mid-stage trial; shares sink

Mon Mar 17, 2008 6:24pm EDT

(Recasts, adds details, share movement)

March 17 (Reuters) - Nuvelo Inc NUVO.O said it would end further clinical development of its experimental blood clot dissolver alfimeprase after the drug failed a mid-stage trial, sending its shares down sharply.

Shares of the biotechnology company, which said it would cut about 40 jobs as part of a reorganization, dropped more than 50 percent in trading after the bell. They had closed at $1.36 Monday on Nasdaq.

Nuvelo, which is cutting its workforce for the second time since last August, expects restructuring charges of about $3.0 million in the first quarter of 2008.

Operating expenses for the year are expected to be in the range of $47 million to $52 million.

The mid-stage trial, which was evaluating alfimeprase in catheter occlusion, did not show sufficient improvement in catheter opening at the higher dose and concentration, the company said.

Alfimeprase had received a fast track status from the U.S. health regulators last December for the treatment of acute ischemic stroke.

Ischemic stroke occurs when a blood vessel that carries oxygen and nutrients to the brain becomes blocked by a blood clot.

Nuvelo said it has ended further clinical development of alfimeprase, including its programs in catheter occlusion and acute ischemic stroke.

Michael Levy, executive vice president of research and development, would be leaving the company as part of the reorganization, it added. (Reporting by Esha Dey in Bangalore; Editing by Deepak Kannan)

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