Corgentech Slammed on Drug Flop

Its drug to prevent vein graft failure could not deliver in late-stage trials.
By Althea Chang ,

Corgentech

(CGTK)

shares plunged Wednesday morning after announcing that its drug to prevent vein graft failure had failed in late-stage trials.

Shares in the South San Francisco, Calif.-based company fell $2.18, or 43.3%, to $5.03.

The experimental drug, E2F Decoy, was intended to promote healing and strengthening of veins following coronary artery bypass surgery. In phase III trials conducted just before the drug was submitted for approval by the Food and Drug Administration, the drug did not delay vein graft failure at a greater rate than a placebo. E2F Decoy was the company's lead product candidate, but Corgentech says it has a deep pipeline of drugs for development.

Bristol-Myers Squibb

(BMY) - Get Report

, Corgentech's partner in E2F Decoy development, will be terminating the collaboration. The New York-based company paid a majority of the costs for development through an agreement made in October 2003. Shares rose 38 cents, or 1.5%, to $25.45, on the FDA approval of its Hepatitis B drug.

Corgentech shares have sunk 69% since the company went public last February. It had not recorded any revenue and did not expect to generate any sales until at least 2005.

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