Alcobra Ltd said it would abandon evaluating its only experimental drug to treat attention deficit hyperactivity disorder (ADHD), after a failed late-stage study, wiping away more than half the company's value before the bell on Tuesday.
The Israeli drug developer is evaluating assets - both internal and external - and will present its strategic direction to shareholders in the coming weeks, Chief Executive Dr. Yaron Daniely said on a conference call.
ADHD, a cognitive disorder characterized by inattention and/or hyperactivity-impulsivity that interferes with functioning or development, affects about 4 percent to 5 percent of adults globally, according to Alcobra.
At first, it was believed to only affect children, but ADHD is now known to persist into adolescence and adulthood.
The drug, MDX, did not induce a statistically significant benefit over a placebo in the 283-patient "MEASURE" trial, the company said.
The drug has a checkered past. The U.S. Food and Drug Administration earlier this month recommended Alcobra conduct a an extra six-month MDX trial to expel safety concerns emanating from preclinical data.
The regulator had placed a clinical hold on the long-acting therapy in September in light of this data.
About 80 patients discontinued treatment in the MEASURE study after the imposition of the hold, Daniely said on Tuesday.
In 2014, Alcobra said it was encouraged by MDX's impact versus a placebo in a prior late-stage adult ADHD trial, only after excluding four patients from the analysis, citing "extreme placebo responses." (bit.ly/ZrFCLR)
In 2015, the drug failed a mid-stage study in Fragile X syndrome, a rare genetic condition that causes a range of developmental problems. (bit.ly/1Lqpn6x)
Alcobra will continue to explore the promise of MDX in other conditions, including Fragile X syndrome, potentially with a partner in Europe, Daniely added.
Shares of the company, which said it expects to end 2016 with a cash balance of $50 million and has less than 20 employees, were down 52.6 percent at 90 cents on the Nasdaq in premarket trading.
(Reporting by Natalie Grover in Bengaluru; Editing by Martina D'Couto)