shares plunged to as low as 86 cents a share on Friday after the biopharmaceutical firm disclosed problems with its clinical study of a proposed treatment for sickle cell disease.
By the time trading closed, Icagen (Nasdaq: ICGN) shares surrendered 74 percent of their value, closing at $1.12. The company lost nearly $75 million in valuation.
Nearly 11 million shares were traded - a staggering total compared to the 50-day average of 17,592.
The company's lead product, ICA-17043, is being tested as part of a Phase III clinical trial. However, an advisory committee has recommended that half of the patients involved in the trial who are not also receiving a related hydroxyurea therapy (a cancer treatment) be withdrawn.
Although no safety concerns were cited, according to Icagen, the news sent the stock into a nosedive. Shares went from $4.24 to as low as 86 cents, plunging below the previous 52-week low of $3.92. Its 52-week high is $9.99.
Kay Wagoner, chief executive officer of Icagen, said that the company is "completely blind to the data" reviewed by the independent data monitoring trial, or DMC. As a result, she said in a conference call that the company "will be reluctant to speculate" about reasons for the DMC's recommendation.
"We are encouraged that the study will continue," Wagoner added and stressed that "no safety concerns" were raised.
The stock did rally somewhat later in the day, trading at $1.14 in early afternoon trading. Still, the $3.10 drop represented a 73 percent collapse of share value.
"This recommendation by the DMC was made after the analysis of efficacy, safety and futility," Icagen said in a statement. "The DMC noted further that there were no specific safety issues identified. Finally, the DMC has requested additional data and will reconvene when these are available."
Icagen is partnering with McNeil Consumer and Specialty Pharmaceuticals in development of the drug. McNeil is under contract to pay Icagen $48 million in milestone payments and also is responsible for half of clinical trial costs in the U.S., Icagen Chief Financial Officer Richard Katz said in the conference call.
Katz said McNeil executives had been briefed about the information. McNeil is a division of Johnson & Johnson.
"We remained very committed to ICA-17043's development," Katz added.
Icagen notified the Food and Drug Administration about the recommendations on Thursday, Wagoner said in the call.
"We are confident that the recommendations to modify the protocol at this time are in the best interest of maintaining the integrity of the clinical trial," said Seth Hetherington, senior vice president of clinical and regulatory affairs at Icagen, in a statement.
The DMC has requested additional data, and Icagen will meet with the group in the third quarter, Wagoner said.
Sickle cell anemia affects some 100,000 people in the United States.
The Phase III trial was to include 300 sickle cell patients. Enrollment had reached 75 percent of that total, the company said.
Phase II results of patients taking and not taking hydroxyurea therapy showed benefit of taking the Icagen treatment, Wagoner said in the conference call.
Sickle cell anemia makes abnormally shaped red blood cells, according to the National Heart, Lung and Blood Institute. The cells are shaped like a sickle, are hard and sticky and tend to get stuck and block the flow of blood to the limbs and organs. This can cause pain, organ damage, and a low blood count (anemia), according to the organization's website.
Sickle cell anemia is an inherited (genetic) disorder and is a lifelong disease.
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