Synergen, a firm that championed what many believed was a cure for sepsis, a blood infection, lost more than two-thirds of its market value on Monday after announcing poor hospital test results for its drug, Antril. Other emerging pharmaceutical companies such as Amgen, Chiron, Genzyme and Biogen have also suffered on the news.
Antril, whose introduction will now probably be delayed by several years, joins a half-dozen other highly touted products to have reached final human trials in the past two years, only to fall short of expectations.
Similar disappointments at Centocor, Xoma and US Bioscience - all start-up firms promoting a limited number of candidate drugs - caused the share price of each to dive, typically by an average of 80 per cent.
Only one in 10 early drug candidates typically reaches the market, but the odds narrow as drugs approach regulatory approval. As a launch date is seen as inevitable, anticipation drives the companies' share prices up wildly.
High-profile disappointments, which have caused biotech share prices to fall by 30 per cent since the beginning of the year, have been compounded by worries about President Bill Clinton's recent attack on drug prices.
Analysts warn that biotech companies, particularly those whose fortunes rest on a single candidate drug, remain risky and volatile.
A number of companies, including Centocor and Gensia Pharmaceutical, are to present data on new heart drugs at a conference next month, and Chiron is to file information on a multiple sclerosis drug with the US Food and Drug Administration.Reuse content