Genzyme Slides On Prochymal Trial Failures

NEW YORK (AP) — Shares of Genzyme Corp. traded lower Tuesday after a drug it is codeveloping failed in two late-stage clinical trials.

Genzyme is developing the adult stem cell treatment Prochymal through a partnership with Osiris Therapeutics Inc. Osiris said Tuesday that the product did not reach its main goals in studies that tested Prochymal against graft vs. host disease, a side effect of bone marrow transplants.

Genzyme, of Cambridge, Mass., owns the right to sell the drug in all countries except the U.S. and Canada. Genzyme and Osiris are also developing Prochymal as a treatment for the intestinal inflammation Crohn's diseases, lung disease, diabetes, and heart damage.

The failure should have "minimal impact" on Genzyme, said Oppenheimer analyst Brian Abrahams. He said Prochymal always appeared to have a high risk of failure. He maintained an "Outperform" rating on Genzyme shares, with a price target of $63.

In afternoon trading, Genzyme stock fell $1.61, or 2.8 percent, to $55.58. Osiris shares tumbled $4.23, or 34.6 percent, to $7.98, and earlier set an all-time low of $7.32.