SGX Pharmaceuticals Plummets

SGX Pharmaceuticals (SGXP Quote) sank a day after saying it would end a clinical trial of Troxatyl as a third-line treatment for patients suffering from acute myelogenous leukemia.

The decision was based on the recommendation of the study's independent data and safety monitoring board, which found that response rates to the drug were unlikely to provide evidence that Troxatyl was a beneficial treatment. The recommendation wasn't made because of safety concerns.

Shares of the biotechnology company were plunging $1.82, or 40%, to $2.78.

"The response rates observed to date in our Phase II/III trial of Troxatyl are not at a level that we believe would support a New Drug Application as a third-line treatment for AML and we feel it is appropriate to follow the recommendation of the DSMB to discontinue this trial," said Mike Grey, president and chief executive of SGX.

Grey said Troxatyl did produce interesting clinical results in other indications, "and we remain optimistic for its potential in these other indications."

SGX made the announcement after the market closed Monday. The stock was subsequently downgraded by Piper Jaffray, CIBC World Markets and JMP Securities.