Inotek Pharmaceuticals Corp's shares plunged 71 percent to a record low on Tuesday after the company said its lead experimental drug failed a late-stage study, citing a stronger-than-expected placebo effect.
Inotek's lead drug, trabodenoson, did not confer a statistically significant benefit over a placebo in reducing fluid pressure inside the eye in patients with the most common form of glaucoma and those with higher-than-normal ocular pressure.
There is no cure for glaucoma, the second-leading cause of blindness in the world, according to the World Health Organization. Fluid pressure is a key indicator of glaucoma risk.
Three doses of the drug were tested against a placebo over a three-month period in the trial - with data collected on days 28, 42 and 84 and at four time points during each of these days.
Only the highest dose of trabodenoson came close but still missed the main goal, data showed.
Inotek, whose stock touched a low of $1.75 in morning trading, blamed the study failure on an unexpected high placebo response compared to that observed in mid-stage data.
Piper Jaffray's Joshua Schimmer said that while it may be tempting to hold out hope, he lacked confidence given the multiple study arms as well as the disconnect in findings versus the mid-stage trials.
Additional data on the drug is expected later this quarter, and will determine Inotek's next steps, the company said on Tuesday.
Aerie Pharmaceuticals Inc, which is developing similar drug Rhopressa, is expected to resubmit an application to market the treatment at the end of the first quarter.
These new eye treatments promise to improve outcomes and reduce side effects associated with current glaucoma medicines, exploiting a dearth of innovative new products for the disease.
Aerie and Inotek's drugs are the first to target the trabecular network, the main drain through which fluid flows out of the eye, though they do so in different ways.
No new class of medicine has been introduced since Pfizer Inc's Xalatan, known generically as latanoprost, in 1996.
Inotek is also testing a combination of trabodenoson with latanoprost. Aerie also has another drug in development called Roclatan, which combines Rhopressa and latanoprost.
Ocular Therapeutix is taking another approach. Its device - which can be inserted into the eye to deliver regular glaucoma medication - is in mid-stage development.
Prostaglandins are the most widely prescribed glaucoma drugs, but can cause eye redness and changes to eye pigmentation and eyelash length.
(Reporting by Akankshita Mukhopadhyay in Bengaluru; Editing by Maju Samuel and Saumyadeb Chakrabarty)