BioDelivery tanks as its pain gel comes up short in Phase III

BioDelivery Sciences' ($BDSI) in-development pain gel failed to meet its main goal in a late-stage trial, a surprise turn for the company as it looked forward to an FDA submission.

The drug, a topical formulation of the generic clonidine designed to treat diabetic nerve pain, failed to chart a statistically significant improvement in symptoms compared to placebo. That outcome was "unexpected," the company said in a statement, pointing back to August when an interim analysis showed that the gel was on the path to success.

The problem, according to BioDelivery, came when BioDelivery enrolled 80 more patients in the study in response to that interim data. The "added cohort of patients performed very differently than those assessed in the interim analysis, which led to our outcome," Executive Vice President Andrew Finn said.

The news sent BioDelivery's shares down as much as 30% on Monday morning, as investors feared an indefinite delay for clonidine gel could seriously hamper the biotech's near-term prospects.

But the company isn't giving up, arguing that the lessons of the Phase III failure will allow it to design future studies to boost the odds of success. "Going forward," Finn said, "we are confident that the data from this study will provide us with the necessary information to enhance patient entry criteria, patient recruitment and site selection."

BioDelivery in-licensed the gel from Arcion Therapeutics in 2013, paying $2 million up front and promising up to $37.5 million in cash and stock if the drug succeeds.

Meanwhile, BioDelivery and partner Endo ($ENDP) are rolling toward an FDA decision with BEMA Buprenorphine, a cheek-delivered pain treatment that came through in Phase III last year.

- read the statement

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