BOTHELL, Wash. ( TheStreet) -- A novel "genetic fix" developed by AVI Biopharma ( AVII) was able to increase levels of a key protein involved with muscle function in patients with muscular dystrophy, according to results from a small study announced Monday.

But AVI shares fell 21% to $1.22 in early Monday trading because the experimental therapy, known as eteplirsen, was not yet able to improve muscle function or walking ability in these patients, the company said.

On a conference call Monday morning, AVI executives called the small phase II study, which enrolled just 12 boys with Duchenne muscular dystrophy (DMD), a success because eteplirsen treatment for six months resulted in a statistically significant increase in the production of dystrophin compared to placebo.

Dystrophin is a protein that plays key role in muscle function and repair. The genetic inability to make dystrophin is what causes muscular dystrophy. The AVI drug eteplirsen is designed to "skip over" the section of damaged gene in DMD patients and therefore restore the gene's ability to produce partially functioning dystrophin.

In the study, four patients treated for six months with a 30 mg dose of eteplirsen had an average 22.5% increase in dystrophin production compared to no increase in four patients treated with a placebo. The difference was statistically significant, AVI said.

Another four patients were treated for three months with a higher, 50 mg dose of eteplirsen but did not show a significant increase in dystrophin production. AVI executives said this mixed outcome suggests longer treatment is required before meaningful levels of dystrophin are produced.

In theory, more dystrophin embedded in muscle tissue should help DMD patients function better but so far, a clinical benefit associated with eteplirsen remains elusive. Performance on a six-minute walk test and other clinical outcome measures were essentially the same for patients treated with eteplirsen and placebo, AVI said.

The company said it was hopeful that longer follow up with patients in the study will pick up clinically meaningful improvements in muscle function. The patients treated initially with placebo are now being rolled over to start taking eteplirsen and all patients will be followed through 40 weeks.

Additional results from the phase II study will be presented at the end of April at the American Academy of Neurology annual meeting.

--Written by Adam Feuerstein in Boston.

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