Shares in Neurochem Inc. plummeted by more than 40 per cent yesterday on news that its would-be blockbuster drug to fight Alzheimer's disease was a bust in a key clinical trial.
Neurochem stock plunged $2.56 - almost 44 per cent - to close at $3.30 on the Toronto Stock Exchange, after the Laval, Que.-based drug developer said on Sunday that results from its Phase III trial in North America "did not demonstrate a statistically significant difference" on patients.
The news confirmed speculation among many analysts over the past few months that the drug - Alzhemed - was not the silver bullet investors had been hoping for.
Analyst Eun Yang of Jefferies and Co. dropped coverage of Neurochem yesterday. Another analyst, David Dean of Cormark Securities Inc., wrote in a research note: "While the writing has been on the wall for many months that this Alzhemed trial has failed, it appears to us that Neurochem has no viable programs left."
Neurochem said that the U.S. Food and Drug Administration rejected a proposed adjustment to the trial's original statistical model, thus resulting in the inconclusive data.
The testing involved 1,052 patients suffering from mild-to-moderate Alzheimer's disease at 67 locations in Canada and the U.S.
The company also said it has established a special advisory board to mull future options and still hopes to modify its study design for Phase III trials in Europe.