U.K. biotech analysts are writing off Phytopharm as a lost cause after its lead drug proved to be a complete failure in a 400-patient Parkinson's study. Shares of the biotech ($PYM) were eviscerated by the news, plunging more than 80% and leaving the company with a negligible market cap of around £6 million.
Early-stage patients demonstrated no meaningful response to any of the three doses tested in the Phase II study, either on the primary or secondary endpoints. As a result, Phytopharm slammed the brakes on all R&D spending and triggered a strategic review to determine which options, if any, it could still pursue.
"Cogane had demonstrated encouraging efficacy in a wide range of industry standard pre-clinical models but this promise has not translated into clinically meaningful efficacy in this study," said CEO Tim Sharpington.
For U.K. analysts the setback was another bleak reminder of just how disappointing the biotech field has been for investors in recent years. Renovo, Minster and Antisoma all unraveled in the face of negative late-stage studies in recent times, leaving another generation of developers trying to advance against tough headwinds and a harsh investment climate.
"The comprehensive nature of the failure raises questions over the relevance of the pre-clinical models used, and the size/expense of the trial that was required to prove that Cogane was futile," Peel Hunt analyst Paul Cuddon told Reuters. And until biotechs can learn how to identify truly valuable assets through preclinical studies, he added in a stinging criticism, the sector will remain little more than a lottery for investors looking to bet on nasty odds.
Researchers at Edison agreed about the biotech's future, noting that Phytopharm's chief value right now may be to act as a shell company for some other biotech looking to go public in a reverse merger.
- here's the press release
- read the Reuters story