(Reuters) - Biota Pharmaceuticals Inc said its influenza treatment failed to meet the main goal in a mid-stage study, about two months after the company lost a key government contract supporting the drug's development.
Biota's shares fell as much as 29 percent to a record low of $2.29, making the stock one of the top percentage losers in early trade on the Nasdaq.
The U.S. Department of Health and Human Services told the company in April that it was pulling out of its contract to support the drug's development with up to $231 million in funding.
The agency did not offer a reason for ending the contract.
After losing the contract, Biota announced a restructuring plan that included cutting its workforce by about two-thirds and closing a facility in Melbourne, Australia.
The long-acting drug, Laninamivir octanoate, is a neuraminidase inhibitor administered via inhalation.
Neuraminidase inhibitors, like Roche Holding AG's Tamiflu and GlaxoSmithKline Plc's Relenza, target a protein that enables the virus to emerge from the host cell and reproduce.
Two doses of the drug were tested against a placebo in 639 patients to treat influenza A and B, the company said.
Patients given a 40 milligram (mg) or 80 mg dose did not achieve a statistically significant reduction, compared with the placebo, in the median time taken to alleviate influenza symptoms, Biota said.
The company's partner, Daiichi Sankyo Co Ltd, has been marketing Laninamivir octanoate in Japan since 2010 under the brand name Inavir.
The company will not independently advance development of the drug, Chief Executive Russell Plumb said on Friday.
Biota said it would provide detailed efficacy and safety data from the trial in early September.
The Alpharetta, Georgia-based company's shares were trading down 25.4 percent at $2.39.
The stock, which traded at more than $105 a decade ago, has fallen 42 percent since the company lost the contract.
Reporting by Natalie Grover in Bangalore; Editing by Savio D'Souza and Simon Jennings