ViroPharma plunges after releasing study data
By Stephanie O'Brien, CBS MarketWatch
Last Update: 3:13 PM ET Apr 11, 2000 NewsWatch
EXTON, Pa. (CBS.MW ) -- ViroPharma shares lost more than 65 percent of their value Tuesday after the company said three late-stage trials, including one for the common cold, failed to show that one of its drugs performed statistically any better than a placebo.
The stock recently traded at 24 1/8, off 47 7/8 or more than 65 percent.
The Exton, Pa..-based company (VPHM: news, msgs) released results from three Phase III clinical studies of its drug Pleconaril for two illnesses, viral respiratory infection-the common cold- in adults and viral meningitis in adults and children.
The company's press release details the study results.
J.P. Morgan analyst Franklin Berger downgraded the stock to "market perform" from "buy" after the release of the data, citing statistical insignificance.
"We believe these results call into question the commercial viability of Pleconaril," Berger said in a note to clients. "Even if the trials can be redesigned with new entry criteria or new endpoints, the overall marginal efficacy demonstrated by this product in several clinical trials, makes it unlikely to be approved by the FDA for non-life threatening medical conditions, such as colds and viral meningitis," Berger said.
The analyst also withdrew his price target, which was previously $45. "At this time, we view ViroPharma as a highly speculative stock, and would not view weakness as a buying opportunity," Berger said.
Needham & Co. analyst Carolyn Pratt had a different interpretation of the study data, saying results were "mixed"
"While pleconaril did not demonstrate a statistically significant improvement over placebo, in our view, the drug clearly showed a clinical benefit" in some patients.
"When the dust settles, we believe the company will actually be in better shape that today's announcement may suggest," Pratt said. "We continue to believe that Pleconaril will gain FDA and be a commercial success."
The company's stock has had dramatic swings in the past as investors bid up the shares in anticipation of a "cure" for the common cold. See related story. In July, ViroPharma shares soared after the company said studies showed that Pleconaril reduced the duration and severity of viral respiratory infection, a severe form of the common cold. See story.
Stephanie O'Brien is a reporter for CBS MarketWatch .Downgrades:
ViroPharma (VPHM: news, msgs) Morgan Stanley DW Neutral Outperform Sees shares under pressure until more clinical data or partnerships are announced
ViroPharma (VPHM: news, msgs) J.P. Morgan Market Performer Buy
ViroPharma (VPHM: news, msgs) USB Piper Jaffray Buy Strong Buy Sets tentative new $40-$45 tgt; says would be more aggressive buyers on an overcorrection