FMI.TO down 50% Drug misses. You nailed it.
Bad weekend for cholesterol drugs.
UPDATE 3-Forbes Medi-Tech plummets after drug misses goal
Mon Dec 4, 2006 12:37 PM ET
(Adds details and analyst quotes)
TORONTO, Dec 4 (Reuters) - Shares of Forbes Medi-Tech Inc. <FMI.TO> <FMTI.O> lost more than half their value on Monday after results from the U.S. Phase II trial of the cholesterol lowering drug, FM-VP4, failed to achieve the company's goals.
The stock fell C$1.49, or 55.4 percent, to C$1.20 on the Toronto Stock Exchange on heavy volume of 700,000 shares.
The life sciences company, which researches treatments for cardiovascular diseases and already has a cholesterol-lowering product, said the results missed the company's target of an average 15 percent reduction in LDL, or bad cholesterol.
However, the first goal of the study was met, with a statistically significant reduction of 9 percent in LDL from baseline after 12 weeks.
"While we acknowledge that the results of the trial do not support a blockbuster market potential for FM-VP4, there is a significant market for alternative LDL-lowering products," company president and chief executive Charles Butt said in a statement.
Forbes said it will review further data as they become available in the next few weeks and will continue to assess out-licensing opportunities in North America and international markets.
"It's disappointing," said Karen Boodram, a biotechnology analyst at Pacific International Securities in Vancouver, British Columbia.
Boodram said the treatment failed to show that it could compete in the cholesterol-lowering market after it achieved less than the required 15 percent reduction in the bad cholesterol.
"It doesn't cut it as a product that can really be used together with products like Lipitor or the various other statins," she said.
"There is probably an alternative market for it. Yes it does lower lipids, but not to the extent that they were hoping. So that is bad news."
Boodram said the company must now try to position the treatment for the alternative market. "There is still value, but not value as a blockbuster," she added.
Drugs receive the blockbuster designation when it is determined that they could generate more than US$1 billion in annual sales.
The disappointing results from Forbes followed bad news from Pfizer Inc. <PFE.N>, whose shares tumbled more than 15 percent after the world's biggest drug maker unexpectedly ended development of its most important experimental medicine.
Pfizer halted work on torcetrapib, which was designed to raise levels of "good" HDL cholesterol, because of increased heart problems and mortality among patients given the product in a late-stage trial.
(Additional reporting by Blaise Robinson in Toronto)
($1=$1.14 Canadian)
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