Achillion Pharmaceuticals Inc. plunged 58 percent after U.S. regulators kept the company’s experimental hepatitis C drug sovaprevir on hold because of abnormal liver results.
Achillion sank to $3.02 at 4 p.m. New York time in its biggest drop since the shares started trading in 2006. The New Haven, Connecticut-based company has lost 62 percent this year.
The Food and Drug Administration determined the compound’s development shouldn’t resume after the company responded to all the issues raised by the agency in June, Achillion said in a statement after the market closed on Sept. 27. The company will focus on other hepatitis C medicines in its portfolio, with results of a planned combination study of two medications by next year, Chief Executive Officer Milind Deshpande said in the statement.
“It would appear there is a good chance sovaprevir will not be able to progress further in development,” Phil Nadeau, an analyst with Cowen & Co., wrote in a research note today.
Achillion is competing with drugmakers including AbbVie Inc. and Gilead Sciences Inc. to develop new treatments for the disease, a market analysts estimate may be $20 billion. Hepatitis C is estimated to affect 170 million people worldwide.
High levels of liver enzymes, which can indicate damage, were observed in healthy patients when sovaprevir was combined with two medicines used to treat HIV infections, the company said in July. The tests were performed to look for possible drug interactions. The combination may have resulted in higher-than-expected blood levels of the therapies, Achillion said in July.
The company plans to work quickly with the FDA to lift the clinical hold, Deshpande told analysts and investors today on a conference call.
“We remain highly optimistic we can work with the agency to address their concerns in a timely fashion,” Deshpande said.