Shares of Tranzyme Pharma plummeted 76 percent Thursday after the company reported discouraging test results for an experimental drug.
The Durham drug-development company reported that preliminary results from a Phase 2B trial of TZP-102 found that the drug performed no better than a placebo. The drug is being developed to treat debilitating gastrointestinal problems triggered by diabetes and other diseases.
CEO Vipin Garg told analysts during a conference call that the company is not giving up on the drug despite the disappointing results.
The trial results reported Thursday evaluated 10 milligram and 20 milligram doses taken once daily. But the company also is in the midst of testing the effectiveness of a 10 milligram dose taken three times daily. Results from that test are expected to be announced in the first half of 2013.
“We still believe that TZP-102 can play an important role in the treatment of diabetic gastroparesis, especially in consideration of the lack of treatment options for the millions of patients suffering from this condition,” Garg said. “It has been almost 20 years since a new product has been introduced to treat patients with gastroparesis. As a result the (Food and Drug Administration) has granted fast-track status” for the drug, which can accelerate its path to winning regulatory approval.
Garg also noted that in the 2B trial unveiled Thursday the “placebo effect” was higher than expected.
In March Tranzyme halted development of a drug designed to restart the body’s digestive functions after bowel surgery in the wake of disappointing Phase 3 results. That drug was the company’s most advanced drug candidate at the time and its shares plunged 43 percent when those results were announced.
Tranzyme shares closed Thursday at 95 cents, down $3.02. The company’s shares have fallen 67 percent this year.
Tranzyme went public in April 2011 at $4 a share, raising nearly $50 million from investors in the process.