Small biotech stocks live and die on the status of their flagship drug therapies, with every clinical trial holding the potential to either boost or sink a company’s stock. That’s exactly what happened to Cyclerion Therapeutics (NASDAQ: CYCN), which saw its shares plummet after it reported that its flagship drug essentially flopped in a phase 2 clinical trial.
Cyclerion’s main drug, praliciguat, is meant to target patients with diabetic nephropathy, which is a disease where kidneys struggle to function due to long-term diabetes. Unfortunately for shareholders, the company announced that praliciguat failed to meet its primary end goal of reducing the amount of protein in patient’s urine, a symptom of ongoing nerve damage that comes with diabetes.
While the company, after removing certain patient groups from the data, showed some signs of improvement, neither the Food and Drug Administration nor industry experts were content with this attempt to justify the study’s failure.
The company also provided an update on a separate clinical trial which also failed to succeed. In this separate trial, praliciguat was tested to see whether it would make a difference for patients with a certain type of heart failure. Unfortunately, there was zero improvements, although a mild reduction in long-term blood sugar levels.
“I am encouraged by the estimated reduction in albuminuria of 15% or more, compared with placebo, on top of current standard of care. This molecule modifies pathways that are complementary to those targeted by usual care, and it warrants further investigation as a potential treatment for patients with diabetic kidney disease,” said Ian de Boer, M.D and the chief medical expert involved in the trials. Although Dr. Boer and Cyclerion tried to mitigate what was essentially a failure, shareholders and investors reacted appropriately as shares plummeted. “Diabetic kidney disease remains the leading cause of kidney failure requiring dialysis or kidney transplantation. We need more treatment options to address this growing patient population,” he added.
In response to the news, Cyclerion has decided to stop the development of the drug specifically as a treatment for patients with heart failure, but still intends to work on the drug as a potential diabetes treatment. Although there was some small improvement seen in the initial phase 2 clinical study after combing through the data, prospects don’t seem particularly encouraging for the drug candidate.
Shares of Cyclerion Therapeutics plunged by a whopping 79% in response to the news, sending the stock hitting an all-time low. Although Cyclerion’s praliciguat wasn’t the most promising drug candidate on the market, investors still had some hope that maybe the company would hit a major home run if it showed some impressive results. It seems like this won’t be the case anymore as many investors are exiting their positions and saying goodbye to the company.
Cyclerion Therapeutics Company Profile
Cyclerion Therapeutics Inc is a clinical-stage biopharmaceutical company harnessing the power of soluble guanylate cyclase (sGC) pharmacology to discover, develop and commercialize breakthrough treatments for serious and orphan diseases.Its focus is on enabling the full therapeutic potential of next-generation sGC stimulators. – Warrior Trading News
