Galapagos NV (GLPG) dropped the most since it started trading in Brussels almost six years ago after halting a test of an experimental rheumatoid arthritis drug because it failed to achieve the desired results.
The shares fell as much as 26 percent, the biggest drop since the initial public offering on May 6, 2005. The Mechelen, Belgium-based drugmaker declined 2.96 euros, or 24 percent, to 9.24 euros at 11:06 a.m. in Brussels.
An interim review committee recommended the study be discontinued due to “limited efficacy potential of the compound,” called GLPG0259, in the mid-stage trial, Galapagos said in a statement today.
The news is “a clear disappointment,” said Jan De Kerpel, an analyst with KBC Securities NV in Brussels, in a research note today. He put a recommendation to buy the stock under review.
The product would have been competitive among existing injectable drugs because it is taken as a pill, Kerpel said. GLPG0259 was the first compound that would have shown Galapagos was capable of developing an experimental treatment from the laboratory to the clinic using its system for identifying drug candidates, he said.
The interim reviewers looked at results for the first 30 patients in the trial. The drug was given to 20 patients while a placebo was given to 10 patients over a 12-week period, and no serious adverse events or safety problems were reported, the company said.
Galapagos said it would complete a full analysis of the information before deciding whether to develop GLPG259 for other diseases.
The company also said it will continue to develop drugs for rheumatoid arthritis, and has four other molecules in development with Beerse, Belgium-based partner Janssen Pharmaceutica NV, a subsidiary of Johnson & Johnson. (JNJ)
Galapagos maintains its financial guidance for 2011 of at least 150 million euros ($217 million) in revenue with profit and positive cash flow, Chief Executive Officer Onno van de Stolpe said in the statement.
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