(Reuters) - Ionis Pharmaceuticals Inc’s shares plunged 40 percent on Thursday, wiping out over $900 million from its market value, after the company said GlaxoSmithKline Plc had scrapped plans to test their heart drug in a late-stage trial.
The British drugmaker’s decision comes two months after the U.S. Food and Drug Administration put a clinical hold on the trial testing the drug, IONIS-TTR, citing safety concerns.
The drug is being developed for the treatment of transthyretin cardiomyopathy, a rare, fatal disease associated with progressive heart failure.
Alnylam Pharmaceuticals Inc, which has a rival drug in late-stage development, now has a substantial first-mover advantage, Chardan Capital Markets’ analysts said on Thursday.
Ionis did not give the reason for GSK’s decision, but said in a statement that the British company would consider options after reviewing additional data from other studies.
Data from another trial on the treatment showed a severe drop in platelet count in patients with a rare condition that affects the nervous system, Ionis said.
The event was also noted in a trial testing volanesorsenon, another drug by Ionis for use in patients with a disorder in which the body does not break down fats.
The California-based company had a market value of $4.26 billion as of Wednesday’s close.
Cowen and Co analysts cut their rating on Ionis’s stock to “market perform” from “outperform”, citing investor fears that the adverse events could be seen with the company’s other drug candidates. Piper Jaffray cut its price target to $35 from $60.
Ionis shares were down 39.8 percent at $21.22 in afternoon trading after touching a near three-year low, while Alnylam’s stock was up about 11 percent.
Reporting by Amrutha Penumudi in Bengaluru; Editing by Kirti Pandey