Synergen's stock price plunged nearly 50 percent yesterday, and the future of the once high-flying biotechnology company fell into doubt, after the company said it was halting human trials of its flagship drug for the treatment of sepsis, an often-fatal kind of bacterial infection.
Synergen's announcement followed a series of disappointments for other biotechnology drugs in recent months that have contributed to a protracted bear market for biotech stocks.
The Boulder, Colo.-based company said it would discontinue development of the drug Antril because an interim review of data showed that the drug failed to save the lives of patients infected with the disease.
Antril is the fourth biotech compound aimed at sepsis that has failed.
Last year, drugs produced by Centocor and Xoma could show positive results only in a small subgroup of patients that could not be readily identified as potentially benefiting.
And earlier this year, Chiron, one of the most successful biotech concerns, quietly halted trials of its own sepsis drug candidate.
Antril's failure is a devastating blow to Synergen, which said it would now lay off more than half its 630 employees and take an unspecified charge.
Synergen executives also said the company was exploring mergers, joint ventures and other options for staying in business in the face of its dwindling cash reserves.
One possibility includes selling its manufacturing plant in Boulder.
Synergen shares lost nearly half their value, closing at $4.50 yesterday in Nasdaq trading, down $4.375. That left the company with a market value of a little more than $100 million.
Largely on investors' expectations for Antril, Synergen shares traded as high as $67 a share in 1992, for a market value of about $1.7 billion.
Synergen, which has never had revenue or profit, ended its second quarter on June 30 with approximately $135 million in cash; it has been spending $20 million a quarter.