Oxygen Bio halts work on brain injury drug over enrollment woes

Oxygen Biotherapeutics' ($OXBT) rollercoaster development of a brain injury treatment has come to a grinding halt, as the biotech has put an end to a mid-stage trial on the drug and is looking to move on. 

The treatment, Oxycyte, is an intravenous product designed to speed up recovery from traumatic brain injury. Last year, with the support of the U.S. military, Oxygen took its candidate into Phase IIb study, eventually enduring an FDA clinical hold over some worrying signs that the drug could spur brain hemorrhages. In March, the biotech shook free of that regulatory scrutiny, but the trial hasn't gone according to plan ever since, Director Ronald Blanck said.

"With the difficulties we have had enrolling patients at the current Phase IIb clinical sites for Oxycyte, the Oxygen board of directors and management team has decided that completing this trial in a reasonable period of time is not feasible," Blanck said in a statement. "We will be considering strategic alternatives for Oxycyte moving forward."

The news sent Oxygen's shares down as much as 15% on Friday morning, and the Morrisville, NC, company has more than erased the gains tied to the removal of Oxycyte's clinical hold.

With hopes for its brain injury drug effectively dashed, Oxygen is fully focused on its lead prospect, a treatment designed to improve outcomes for patients after cardiac surgery. That candidate, levosimendan, is in the midst of a Phase III trial under the FDA's fast-track designation. The intravenous treatment is already approved in more than 50 countries, and Oxygen traded about $5 million in stock to acquire the North American rights from Phyxius Pharma last year.

- read the statement