Aastrom Biosciences Inc said it would end the late-stage trial of its drug to treat critical limb ischemia (CLI), a form of peripheral arterial disease, and cut about half of its workforce, driving its shares to an all-time low.
The stock was down 34 percent at 75 cents in morning trade on the Nasdaq.
The company now plans to focus on developing the drug, ixmyelocel-T, as a treatment for a heart condition called dilated cardiomyopathy (DCM), in which the heart becomes weak and cannot pump blood efficiently.
"... The optimal use of our resources at this time is to focus .. where clinical development may require smaller studies with lower costs and a shorter path to regulatory approval," CEO Nick Colangelo said in a statement.
Aastrom, which had 77 employees as of December 31, said it had completed a review of the critical limb ischemia study and determined that it might not get a partner in time.
Maxim Group analyst Jason Kolbert said the enrollment process for the late-stage study was arduous, as choosing the right patient who could benefit from the treatment was difficult. The company had planned to enroll 594 patients in over 80 treatment centers for the CLI trial.
"Aastrom lacks the capital to run a late-stage trial without a partner right now and I guess they were unable to find one, so they're stepping back," Kolbert said.
"A well-designed mid-stage study makes a lot of sense versus gambling on a long and expensive late-stage study."
Aastrom said it plans to begin dosing patients enrolled in a mid-stage study for DCM within a few weeks.
Ixmyelocel-T is made using bone marrow extracted from patients. The number of beneficial cells in the marrow is increased in a laboratory setting, and then injected back into the patients.
(Reporting By Vrinda Manocha and Esha Dey in Bangalore; Editing by Sreejiraj Eluvangal)