Macrocure shares crushed after PhIII regenerative med study flops

Macrocure's plan to break into regenerative medicine has slammed into a brick wall. The biotech ($MCUR) reported that its Phase III study for repairing venous leg ulcers looks like a near certain loser, putting the company under a cloud at a critical moment.

Macrocure reported that the data safety monitoring board on the CureXcell study "determined that this study is not expected to meet its primary endpoint." And the news sent its share price into a death spiral this morning, with the stock down 78% as investors joined the rout.

The Israel-based Macrocure, which has been hiring up staff as it planned to wind its way through the regulatory process, says that it may have to mount a third Phase III study, but showed no signs of despair in the face of a serious setback.

Macrocure has been developing a therapy that centers on injecting white blood cells into wounds in order to spur the cellular regeneration needed to speed up wound healing. The company has another program using the same tech in a Phase III study for diabetic foot ulcers.  

A little more than a year ago, Macrocure followed the well beaten biotech path to Nasdaq, raising $54 million after pricing its shares at $10, well under the range that it had set for itself. Regenerative medicine has been experiencing a series of setbacks, witnessing a number of problems gaining the kind of conclusive evidence needed to get regulatory approvals.

As of Wednesday's close, the stock was trading a little north of $12. Nomura analysts, who had been touting a $20 price for the shares, sliced their projection down to $6 today, wondering if the FDA might require another Phase III study for healing chronic wounds below the knee ahead of any approval. That may remain an optimistic outlook, as Macrocure's shares were trading around $3 after the market opened.

"While we are disappointed with the results of the VLU futility analysis, given the positive clinical outcomes seen in our experience with more than 5,000 patients in Israel, we continue to believe that the technology has clinical merit for patients with chronic and other hard-to-heal wounds," said Macrocure CEO Nissim Mashiach in a statement. "We will evaluate the data collected to date in the MC-105 study to determine an appropriate course of action, including the potential initiation of a third Phase 3 study in patients with chronic wounds below the knee. We intend to work closely with the FDA to complete all additional clinical trial work required to pursue the approval and commercialization of CureXcell. Macrocure remains committed to both the technology and our ability to deliver this innovative solution to patients suffering from chronic hard-to-heal wounds. We remain on track with our guidance to report top-line study results from our pivotal, Phase III Diabetic Foot Ulcer clinical trial in October 2015."

- here's the release