Investors Get Teary Over Eleven Biotherapeutics' Dry-Eye Drug Failure

NEW YORK (TheStreet) -- Eleven Biotherapeutics' (EBIO) shares are poised to plummet in Monday's regular stock market session following the late-stage study failure of an experimental drug to treat dry eye disease.

The Eleven Biotherapeutics drug EBI-005 was unable to prevent damage to the cornea or reduce eye pain compared to a control, the company said Monday. The study enrolled 669 patients with moderate to severe dry eye disease. The patients were randomized to receive EBI-005 administered topically in the eye or a control for 12 weeks.

In a harbinger of what is likely to happen after the opening bell, Eleven Biotherapeutics' stock was down 81% at $2.30 in premarket trading Monday morning. The stock closed Friday at $11.97.

The company embarked on the phase III study of EBI-005 in dry eye disease despite lackluster results from a phase II study that also showed no difference in efficacy compared to a control.

On Monday, Eleven Biotherapeutics said it will no longer pursue development of EBI-005 in dry eye disease but will move ahead with plans for a phase III study of EBI-005 in allergic conjunctivitis.

Eleven Biotherapeutics went public in February 2014 at $10 a share. The stock reached $18 a share within a couple of weeks of its public market debut but then languished.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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