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LLY

The Label might not be so friendly combined that their MS drug with Bioms Blew up.

TORONTO, Jan 30 (Reuters) - BioMS Medical Corp (MS.TO) (MS.TO) said its lead drug for the treatment of multiple sclerosis failed to meet its main goal in a mid-stage study, sending the company's shares down more than 50 percent.

The small biotech said the results of the study showed the drug dirucotide did not meet the primary endpoint, in terms of annualized relapse rate, and its associated secondary MRI endpoints.

"We have long believed that the outcome of this study would be very uncertain, given that this trial was statistically underpowered and that the compound was not previously tested on humans for this indication," Maher Yaghi, an analyst at Desjardins Securities in Montreal, said in a research note.

Yaghi downgraded BioMS stock to "hold" from "buy" earlier this week in anticipation of the test results. However, he maintained his price target of C$5.75 a share.

The shares were down 38.8 percent at C$2.10 by late morning, after touching a low of C$1.51 earlier in the day.

The drug, which was being tested in patients with relapsing-remitting multiple sclerosis (RRMS), was, however, well tolerated and met certain secondary endpoints related to the progression of the disease, BioMS said.

"The results are more positive than negative," said Douglas Loe, an analyst at Versant Partners. "The aspects by which the drug did perform well in this trial are those that which are germane to performance in its pivotal secondary progressive MS trial, which is a separate clinical program."

Loe said that program is seen as key to partner Eli Lilly (LLY.N), which signed a licensing and development deal with BioMS in 2007.