Ventrus Biosciences Inc's shares plunged 66 percent after the company said its lead experimental treatment for anal fissures failed to reduce pain compared with a placebo in a second late-stage trial.
The treatment, codenamed VEN 307, was found superior to a placebo for the same indication in another late-stage trial, the company said in May 2012. (link.reuters.com/xuw76v)
Ventrus said on Wednesday it planned to request for a meeting with the U.S. Food and Drug Administration to determine the next steps in submitting a new drug application (NDA).
"We think Ventrus will still submit the NDA for a 12-month review cycle sometime in the third quarter of 2014, which would set it up for a (review date) in mid-2015...we continue to model (its) launch in mid-late 2015", Cantor Fitzergald analyst Irina Rivkind wrote in a note.
The treatment could compete with Rectiv, marketed by Aptalis Pharmaceuticals Inc. Forest Laboratories Inc said in January it would buy Aptalis.
Ventrus' management believes it can move forward as Rectiv, was approved based on data from a single positive trial that required multiple data imputations and analyses, Rivkind said.
Gastrointestinal disorders were the common adverse events reported by the 434 patients in the study, which aimed to reduce anal pain associated with defecation, Ventrus said.
Ventrus acquired the North American rights to the treatment from Switzerland-based S.L.A. Pharma AG, which is testing the drug in a late-stage trial for the condition in Europe.
The drug, which is a calcium channel blocker usually used to treat high blood pressure, works by relaxing the sphincter muscle and increasing the blood supply to the site of the fissure.
It is listed in the U.S. anal fissure treatment guidelines as a preferred agent prior to attempting surgery, and is available only as a compounded medicine, the company said.
Cantor Fitzergald downgraded its rating on the stock to "hold" from "buy" to account for the increased regulatory risk, lower near-term probability of takeout and financing risk associated with potential delays in product launch.
The New York-based company's shares were down at $1.60 in afternoon trading on the Nasdaq. They slumped to a life-low of $1.47 earlier in the day.
(Reporting by Natalie Grover in Bangalore; Editing by Savio D'Souza and Don Sebastian)