Israeli based company Alcobra Ltd’s only drug failed its mid-stage trial test against a type of genetic disorder that can cause autism and ADHD. The company saw it shares fall down to 19%.
Alcobra was hopeful that’s its drug, MDX, aimed at treating Fragile X Syndrome (FXS) was not much different from a placebo in reducing symptom score on a rating scale for attention deficit hyperactivity disorder (ADHD).
The company stock fell down 28% before markets opened on Wednesday morning, but by afternoon it regained some ground.
Piper Jaffray’s Charles Duncan wrote in a research note, that the selloff represents an oversold opportunity for the stock and it is unlikely most investors ascribe significant value to Alcobra’s FXS program as they are focusing on the company’s planned ADHD studies.
Alcobra is testing MDX for ADHD in adults and children. After excluding data from patients who reacted positively to a placebo, the drug cleared a late-stage ADHD trial in October.
MDX met the FXS study’s secondary goals on two scales, VABS and KiTAPS, which assess a patient’s behavior, cognition and attentiveness, reported the company on Wednesday.
Now the company plans to further discuss the results with U.S Food and Drug Administration (FDA) and possibly suggest having VABS scores as the main goal of further studies.
Novartis AG and Roche Holding AG are also companies whose experimental FXS drugs have failed key studies, causing developers to abandon the programs.
No cure is currently available for FXS which affects about 50,000 Americans and can cause behavioral and learning challenges, according to the National Institutes of Health.
Marinus Pharmaceuticals and Australia’s Neuren Pharmaceuticals Ltd. are other drugmakers, in mid-stage studies, testing compounds to treat FXS.