Tuesday, June 30, 2015
Vitae Pharmaceuticals Inc said its diabetes drug failed to significantly reduce blood sugar levels of patients when used as an add-on therapy, raising questions about the drug's potential.
Vitae's shares fell as much as 34 percent on Monday, before paring some losses to trade down 12 percent in morning trading.
VTP-34072, being co-developed with German drugmaker Boehringer Ingelheim, was tested as an add-on to a common diabetes drug, metformin, to treat type 2 diabetes in overweight patients.
Results from a trial testing VTP-34072 as a monotherapy are expected later this year and Boehringer Ingelheim said it will review data from both trials to decide on the next steps for the drug.
However, analysts said they did not have much hope for the drug.
Wedbush analyst Liana Moussatos said she did not expect the drug to continue being tested unless the monotherapy trial had "spectacular results".
The drug works by targeting an enzyme that produces a hormone called cortisol, which increases blood sugar and helps in breaking down fat.
Stifel analyst Thomas Shrader said he did not have much hope for the drug as a monotherapy either, drawing a parallel with Incyte Corp's failed diabetes drug, which had a similar target as VTP-34072.
"Incyte did a trial on the same target," Shrader said. "The data looked pretty good, but they stopped the program. A chemistry company will always be at the mercy of the targets it uses."
The failure of the diabetes drug is the second blow to Vitae this year after trails for its Alzheimer's drug were placed on hold in February.
Vitae is also developing drugs for auto-immune diseases.
The stock was down 12 percent at $13.36 in morning trading on the Nasdaq. Through Friday, the shares had almost doubled since the company went public in September.
reuters.com
