British biotech company Circassia Pharmaceuticals sank on Monday after its experimental cat allergy treatment failed in a late-stage trial.
The company lost almost two -thirds of its value. Its two biggest shareholders are Invesco and Neil Woodford, who have increased their holdings in the last six months to 35.1 and 19.2 percent respectively, according to Thomson Reuters data.
Circassia’s cat allergy treatment failed to meet the main goal in a Phase III study because of a marked placebo effect among patients not on therapy.
All groups in the study showed improvement compared to the baseline and the results of the active treatment groups were not significantly better than those on placebo. All groups showed an improvement of close to 60 percent in rhinoconjunctivitis symptoms, such as itchy eyes, runny noses and sneezing.
Steve Harris, Circassia’s chief executive, said he only got the clinical trial results over the weekend and was surprised. This dramatic placebo effect was not seen in earlier mid-stage clinical trials.
The immunotherapy had aimed to change patients’ underlying allergy by making their immune systems tolerate allergens.
Shares in the company fell 64 percent to 97 pence by 1200 GMT.