Sygnis Pharma's shares plunge as key stroke drug fails PhII

Germany's Sygnis Pharma ($LIOK) says its lead drug failed a mid-stage stroke trial, flunking both the primary and secondary endpoints and triggering a meltdown in its share price.

AX200 is designed to spur development of a protein believed to help heal damaged brains. But investigators say the drug looked no better than a placebo in a study which recruited 328 patients. That's very bad news for investors. Sygnis cut its workforce in half recently as it circled its wagons around the stroke study. AX200 is its only drug in development, and the biotech's shares plunged 63%.

Last summer Sygnis was forced to turn to its main investor, SAP's Dietmar Hopp, for a €6 million loan to finance the company through the end of 2012.

As Bloomberg points out, stroke is a tough target. AstraZeneca has tried and failed with a stroke drug and others have steered clear of a research field strewn with clinical landmines.

"We are very disappointed about the outcome of the study and will have to analyze the full data set in order to fully understand these results, which are not in line with our previous findings. Although the patient group treated with AX200 on average showed a slightly more severe infarct; this does, however, not explain why we could not see any relevant differences between the two groups regarding the patient outcome," said Dr. Frank Rathgeb, the chief medical officer of Sygnis.

- check out the Sygnis release
- here's the story from Bloomberg