Gensia Plummets in Wake of Drug Trials
Gensia Pharmaceuticals’ stock plunged by $13.50 to close at $22 a share Tuesday in over-the-counter trading after the company said that international trials had failed to prove the effectiveness of Arasine, a promising drug designed to prevent heart attacks.
Nearly 7 million Gensia shares changed hands Tuesday, making it the second-most active over-the-counter stock. Units of Aramed Inc., which Gensia formed in 1991 to develop new drug compounds, also fell dramatically in over-the-counter trading, down $16 to $23.50.
Company officials, who were not available for comment Tuesday, said in a press release that a trial conducted in Canada and Europe produced data that “were not statistically significant,” except in two important subgroups.
Gensia’s announcement clashed with results of an earlier, domestic trial that showed Arasine to have “clinically important and statistically significant benefits.” The drug is designed to prevent heart attacks among patients undergoing heart surgery.
Some biomedical industry analysts said they do not believe Arasine’s eventual introduction into the U.S. market will be stymied by the foreign trial data, because of the domestic trials.
Alex. Brown & Sons, a Baltimore-based investment firm, Tuesday maintained a “strong” buy recommendation on Gensia despite the dramatic fall, and New York-based First Boston Corp. kept its “speculative buy” recommendation.
“The market on Tuesday chose to view Gensia in one dimension, the ambiguities from a European trial, and say we’ve got big trouble,” said Amy Berler, an analyst with Alex. Brown & Sons. “But that ignores the fact that, in the U.S., they still have very strong data. (Sellers) used that one narrow bit of information to draw a big conclusion.”
Gensia, which as yet is not selling products, reported a $10.5-million net loss during the second quarter ended June 30, compared to an $8-million loss during the like quarter a year earlier. Gensia’s loss for the six-month period ended June 30 was $19 million.
