Repligen's Autism Drug Falls Short

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Repligen(RGEN) shares sank Monday after its autism drug Secretin failed to produce any positive results in a closely watched phase III clinical trial.

Shares of the Waltham, Mass.-based biotech firm were down $1.69, or 41%, to $2.47 in recent trading. The stock has traded as low as $2.15, a 52-week low.

As detailed here Friday, Repligen was hoping to show that Secretin injections every three weeks improved the behavior and social skills of autistic children 2 to 4 years old, something no other drug has been able to accomplish. But the science connecting Secretin with autism was fuzzy at best, and several prior Secretin studies had failed to show any benefit.

The phase III study was a long shot at best, and Monday's results bolstered the bearish view. Repligen said Monday that the Secretin study failed both its primary endpoints. The drug failed to boost the social interaction of autistic children, compared to children taking a placebo, and Secretin failed to improve the overall well-being of kids in the study.

"This is a sad story. [Repligen] may have an active drug, but it may never see it proven," says Rodman & Renshaw biotech analyst Elemer Piros, who had previously forecast cautious optimism about the study's outcome. "Based on the conference call, the development of Secretin for autism is dead," he added.

Monday afternoon, Piros downgraded Repligen to underperform from strong buy. Rodman & Renshaw has a banking relationship with Repligen.

Repligen is testing Secretin for schizophrenia, with a phase II study expected in the middle of the year.

W.R. Hambrecht analyst Jason Kantor also had been predicting success from the Secretin study. Monday, he downgraded the stock to hold from buy. "We believe that investors will place little or no value on the ongoing phase II program of Secretin for schizophrenia," Kantor wrote in his research note, adding that the stock is likely dead money until more Secretin data are released. Kantor's firm doesn't have a banking relationship with the company.

Repligen had $27.8 million in cash, or 93 cents per share, at the end of September.

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