Depomed shares tank as drug flunks key trial

Shares of Depomed went into free fall this morning after the company announced that Gabapentin GR failed a late-stage trial for nerve pain caused by shingles. Disappointed investors swiftly shaved off 63 percent of the value of the company's stock in retribution. Researchers say that the experimental therapy--an altered form of Neurontin also sold as a generic--demonstrated pain relief for a 10-week regimen in comparison with a placebo, but it was not statistically significant. Carl Pelzel, Depomed's COO, said that the company would evaluate the data but that the results would have no impact on Depomed's clinical development program in menopausal hot flashes.

"The Phase III results we received today were very surprising and disappointing to us in light of the encouraging safety and efficacy data that we observed in our Phase II clinical trial, in which we achieved statistically significant results in a four-week period as compared to placebo," said John W. Fara, chairman, president and CEO of Depomed. "We are particularly surprised to see a high placebo effect that persisted throughout the trial as compared to other large published PHN trials."

- see the release
- read the AP report on the data

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