Santhera shares beaten down on late-stage failure

Switzerland's Santhera Pharmaceuticals took a turn at the stock market's whipping post this morning after announcing that its lead drug missed its primary endpoint in a late-stage study. Its shares swiftly plunged 30 percent on the news.

Santhera's CEO, though, sought to staunch the bleeding by telling Reuters that the failure wouldn't automatically prevent a U.S. approval, provided a European study of the drug goes well. Santhera, said Klaus Schollmeier, might only be delayed 10 months by the setback.

In the study, researchers explored Catena's effectiveness against Friedreich's Ataxia, a neuromuscular disease. But the drug failed to demonstrate a statistically significant improvement in the neurological status of the patients in the study. And analysts weren't quick to back up Schollmeier's sunny perspective.

"This is a huge blow for the company as the outcome of this trial was the basis for the expected filing of the product in the U.S.," WestLB analyst Simon Mather told Reuters. What's more, at its current burn rate, Santhera will run out of cash in 2010.

- read the story from Reuters