BioWorld Today Correspondent

Shares in Paion AG plunged by more than 65 percent Friday on news that the company's clot-busting stroke drug Desmoteplase failed to attain the primary endpoint in a placebo-controlled Phase III clinical trial in acute ischemic stroke.

Moreover, 14 patients on the higher of two doses administered in the trial died, although trial investigators attributed 10 of the deaths to factors other than the drug. Four patients in the placebo arm died, as did three in the lower dose group.

The compound, a genetically engineered version of a protein isolated from the saliva of the vampire bat Desmodus rotundus, is intended to widen the stroke treatment window from three hours to nine hours and therefore extend thrombolytic therapy to a wider patient population.

However, topline results from the 186-patient DIAS-2 (Desmoteplase In Acute Ischemic Stroke) study indicated that it failed to improve clinical outcome, as measured at 90 days after treatment.

Improved clinical outcome was attained in 47.4 percent of patients (n=57) who received 90 mcg of drug per kilogram of body weight (mcg/kg); and in 36.4 percent of patients (n=66) who received 125 mcg/kg. However, the equivalent statistic for the placebo group (n=63) was 46 percent.

Symptomatic intracranial bleeding (brain hemorrhage), the most dangerous complication of stroke therapy, occurred in 3.5 percent of patients on the lower dose of Desmoteplase and in 4.5 percent of those on the higher dose. None in the placebo group experienced the problem.

Clinical outcome was defined as simultaneous attainment of three clinical parameters: a minimum improvement on the NIH Stroke Scale (NHISS) of 8 or an absolute score of zero or 1; a Modified Rankin Scale score of zero to 2; and a Barthel Index score of 75 to 100.

The data, which were presented at the European Stroke Conference in Glasgow, Scotland, contrasted sharply with results from previous, smaller-scale clinical trials in 142 patients. A combined analysis of two earlier studies - known as DIAS and DEDAS - yielded clinical response rates of 23 percent, 37 percent and 60 percent for the placebo, 90 mcg/kg and 125 mcg/kg arms, respectively.

"Physiologically, it does not make sense," Werner Hacke, principal investigator on DIAS-2, said on a conference call. Hacke is chairman of the neurology department at the University of Heidelberg, Germany.

"My personal read is Desmoteplase did not fail, but the placebo, just by chance, had a very good outcome," Paion CEO Wolfgang Soehngen said on the conference call.

"I'm not utterly discouraged, but I am shocked, I have to say that," he added.

As of now, the company does not know whether it has a failed trial or a failed drug on its hands. Further investigation of several aspects of the study are now needed, Wacke said. That will include an analysis of the study protocol itself; an analysis of pharmacokinetic and antibody data; an examination of the "specifics" of the placebo response rate; an extensive analysis of the initial MRI and CT imaging data used to screen potential trial participants; and further study of the deaths that occurred during the trial.

"This will definitely take a few weeks," Paion spokesman Peer Nils Schroeder told BioWorld Today, although the company has not announced a precise timeline on what it intends to do with the program. "If we need more time, we will take more time," he added.

The Aachen, Germany-based firm released the news after the markets closed Thursday evening. The response from investors was swift. The following day the stock dropped to an all-time low of €3.30 (US$4.42) on the Frankfurt Stock Exchange, having closed the previous day at €10.50. By late afternoon, it was trading at €3.57, and at that point, its trading volume had exceeded any during the firm's two-and-a-half-year history as a public company.

The malaise also spread to one of Paion's large-cap partners. Copenhagen, Denmark-based H. Lundbeck A/S, which has rights to Desmoteplase outside of North America, was at DKK127.50 (US$22.93) on the Copenhagen Stock Exchange during early afternoon trading Friday, down DKK10.75, or 8.4 percent, from the previous day's close.

Shares of New York-based Forest Laboratories Inc. (NYSE:FRX), Paion's North American partner, closed at $50.19, Friday, down 52 cents.

The blind, randomized, placebo-controlled, dose-ranging trial, which was jointly conducted by Paion and Forest, recruited patients across Europe, the U.S., Canada, Australia, Hong Kong and Singapore.