Biotech Values

[DewDiligence]

ConjuChem shares sink as nausea worries hurt study

[Evidently, my skepticism based on the interim data released three months ago was justified (#msg-2841010). At today’s CC, a questioner asked what I thought was a simple, direct question: what was the absolute reduction in HbA1c in each cohort? The answer was that this info was not readily available. Whom did they think they were kidding?]

http://biz.yahoo.com/rc/040715/health_conjuchem_stock_1.html

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Thursday July 15, 1:32 pm ET

TORONTO, July 15 (Reuters) – Shares of ConjuChem Inc. (Toronto:CJC.TO) lost nearly half their value on Thursday despite encouraging clinical data for its diabetes drug, as investors worried about high levels of nausea among patients and a delay in finding a partner to help develop the treatment.

Shares of ConjuChem, which have risen more than 500 percent in the past year, were down 44.5 percent, or C$4.57, at C$5.68 in the early afternoon on the Toronto Stock Exchange .

With more than more than 8 million shares changing hands, ConjuChem was the most active issue in Toronto and was trading about 24 times its average 90-day volume of 370,000 shares.

Analysts said the results from the study seemed confusing, and during ConjuChem's conference call on Thursday some expressed concerns about the high level of nausea.

"The study looked like it was too complicated to provide good data," said Brian Bapty, an analyst with Raymond James in Vancouver, British Columbia. "There were too many variables."

Jacques Lapointe, chief executive of Montreal-based ConjuChem, told analysts that he expects a partner to come on board next year.

"We had assumed a partner would show up by the end of 2004," Bapty said.

Dundee Securities analyst David Martin slapped an "under review" rating on the shares and on its target share price for ConjuChem, and said he needs more data to make an accurate assessment of long-term impact.

Industry watchers said it looks like a partner will most likely require data from a diabetes study using ConjuChem's DAC:GLP1 diabetes drug combined with anti-diabetic drug metformin, as well as indications of lower levels of nausea before coming on board. The data from the clinical trial of the two drugs are expected at the end of 2004.

Lapointe said that the concern on the level of nausea was "appropriate" and added that "a partner would want to see resolution."

After markets closed on Wednesday, ConjuChem said its DAC:GLP1 drug reduced blood sugar levels among patients with type 2 diabetes; however, of the 206 patients in the phase II trial, only 94 completed the study, largely because of nausea and vomiting.

"I am not overly concerned (about the nausea)," Lapointe told he conference call. "The issue will be resolved." ConjuChem plans a bigger phase III clinical study.

Douglas Loe, an analyst with Dlouhy Merchants, said that investors may also be worrying about ConjuChem's need for cash within the next year.

Lapointe said ConjuChem, which spends about C$3 million ($2.3 million) a month, has enough money to last until the first quarter of 2005. He said he was looking at financing options but did not give details.

($1=$1.32 Canadian)
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