(Reuters) - Circassia Pharmaceuticals (L:CIRCI) lost more than half its value on Monday as its experimental cat allergy treatment failed in a late-stage trial, dealing a major blow to the high-profile British biotech company.
Circassia listed on the London stock market in March 2014 in Britain's largest biotech flotation for decades and last year it expanded by buying two companies focused on asthma.
Hopes for a cat allergy treatment have been central to its investment case, but its immunotherapy failed to meet the main goal in a Phase III study because of a marked placebo effect among patients not on therapy.
As a result, Circassia said, all groups in the study showed improvement compared to the baseline and the results of the active treatment groups were not significantly different to placebo.
RBC analyst Nick Keher described the news as "very disappointing" and shares in the company fell 62 percent in early trading to 100p.
Unlike antihistamines, which provide short-term relief, Circassia's treatment aims to change patients' underlying allergy by making their immune systems tolerate the allergens.
The company said it would stop its recently initiated registration study of its grass allergy treatment and preparatory work for a study on suitable doses of its ragweed allergy therapy.
Steve Harris, Circassia’s chief executive, said he was "surprised and disappointed" by the results, since such a dramatic placebo effect was not seen in earlier mid-stage clinical trials.
Oxford-based Circassia added that its respiratory franchises were unaffected by the results and said its unaudited cash balance remained over 139 million pounds.