Tranzyme shares crash after another key clinical trial failure

Back in the spring, Tranzyme Pharma switched focus after its lead drug failed to beat out a placebo in a pair of late-stage trials aimed at speeding GI recovery in subjects who had undergone partial bowel resection. Today, the Research Triangle Park, NC-based biotech ($TZYM) acknowledged that its backup program for diabetic gastroparesis failed a Phase IIb study.

The news proved to be a bitter pill for investors, who quickly abandoned the biotech. Tranzyme shares crashed, falling 75% on the headline.

Investigators tested two doses of TZP-102--an oral ghrelin agonist--against a placebo to see if either could significantly improve symptoms of gastroparesis, primarily nausea, early satiety, bloating and upper abdominal pain. Neither did the job, but once again Tranzyme is hoping that a mirror study can produce the data it's looking for.

Tranzyme--named a Fierce 15 company back in 2005--has had a rough run these past two years. The company was forced to offer a big discount when it went public in 2011. And the failure of the GI drug program in the spring triggered a meltdown in its share price.

"We are understandably disappointed with the results of this trial; however, our second Phase IIb trial known as DIGEST is ongoing. In DIGEST we are evaluating a 10 mg dose of TZP-102 administered three times daily before meals, rather than once daily as in the trial just completed. We anticipate announcing top line results for DIGEST in the first half of 2013," said Tranzyme CEO Vipin K. Garg. 

- here's the press release

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