Shares of Adolor Corp. plunged 59 percent yesterday after the Exton company and partner GlaxoSmithKline suspended development of an experimental drug to treat bowel discomfort commonly associated with use of opioid painkillers.
Adolor shares fell $5.12 to $3.60 on the Nasdaq. It was the worst-performing of small-company stocks that make up the Russell 2000 index.
The companies said late Monday that they were halting testing of Entereg after researchers noted a higher risk of heart attacks, tumors and bone fractures in patients taking the drug.
The findings cast doubt on whether Entereg, also known as alvimopan, will ever be commercially approved.
Adolor and GlaxoSmithKline have postponed further clinical trials until results from the 12-month safety study are more thoroughly analyzed.
Analysts at Citigroup, First Albany, Friedman Billings Ramsey, WR Hambrecht, Cowen & Co., and American Technology Research downgraded Adolor's stock.
In the 12-month study, researchers found 14 cases of cardiovascular events, including heart attacks, in 538 patients on Entereg, compared with three out of 267 on placebo.
Founded in 1993, Adolor has been in pursuit of its first product, Entereg, which treats constipation and abdominal discomfort that are common side effects of powerful opioid pain medicines, such as morphine. Little more than a year ago, Adolor shares traded above $27.
But since Labor Day, the unprofitable company has had a series of setbacks in the later stages of testing Entereg.
The Food and Drug Administration in November asked for more safety data after an interim six-month study found a higher risk of cardiovascular side effects. In December, Adolor cut 52 jobs, including 35 people from its sales force. It had 128 full-time employees as of Dec. 31.
Analysts have said that if the 12-month data confirmed safety risks, GlaxoSmithKline would likely end its partnership with Adolor.
London-based GlaxoSmithKline, which has a U.S. headquarters in Philadelphia, said in a statement that the findings were "unexpected," and that "we are working to gain a better understanding" to "help guide our future development."
GlaxoSmithKline bought the rights to codevelop and market Entereg for as much as $270 million in April 2002.
Adolor said it still hoped Entereg would be approved for a separate condition, postoperative ileus, as a short-term therapy for patients recovering from bowel surgery.
The FDA issued a conditional approval letter in November for Entereg to treat postoperative ileus but requested 12-month safety data, including an analysis of cardiovascular events and a risk-management plan. Adolor said it intended to submit its response to the FDA's questions during the second quarter.
Cowen & Co. said the new developments "have made us skeptical on Entereg's prospects" for opioid-induced bowel dysfunction, which Cowen viewed as "the drug's key market opportunity."
"While approval for postoperative ileus could be secured," Cowen analyst Leland Gershell wrote, "we have yet to hear any details" of the companies' risk-management plan. "And we believe such a plan could further limit Entereg's opportunity in a relatively small, $50-million-a-year, market."
First Albany analyst David Webber said in a note to clients the key risks were "that GlaxoSmithKline could abandon the partnership, that safety risks could reduce the potential market size, that Entereg's competitive position could weaken, and that the FDA could reject" Entereg for postoperative ileus.
"We expect substantial delays for Entereg in opioid-induced bowel dysfunction," Webber wrote.
Progenics Pharmaceuticals Inc. is developing a competing drug, a formulation of methylnaltrexone to treat opioid-induced constipation, with partner Wyeth Pharmaceuticals in Collegeville.
American depositary receipts of GlaxoSmithKline closed down 17 cents to $55.95 on the New York Stock Exchange.