It was two strikes and you're out for velafermin, as CuraGen Corp.'s Phase II dose-confirmatory trial in severe oral mucositis failed to meet its primary endpoint, and the company promptly shut down the program.

The Branford, Conn.-based company said the trial, evaluating a single dose of velafermin to prevent the condition, was safe and well tolerated. But the endpoint failure doomed it, and the company pledged to turn its energies to other product candidates: namely, belinostat, a Phase II histone deacetylase inhibitor for the treatment of solid tumors; and hematologic malignancies, and CR011-vcMMAE, a Phase I/II antibody-drug conjugate for the treatment of metastatic melanoma.

This is the second failure for velafermin. In 2005 it missed its primary endpoint in a Phase II trial for the same indication. Some positive trends that emerged from that data lead to the continued development efforts.

The latest trial was a randomized, double-blind, placebo-controlled study to assess a reduction in the incidence of severe Grade 3 or 4 oral mucositis in patients receiving high-dose chemotherapy followed by autologous bone marrow transplantation (BMT). The trial enrolled 390 patients at 33 centers in the U.S. Patients were randomized to receive a single infusion of either placebo or one of three dose levels of velafermin (10 mcg/kg, 30 mcg/kg or 60 mcg/kg) administered 24 hours after BMT.

The primary endpoint was a decrease in the incidence of severe oral mucositis in patients receiving 30 mcg/kg velafermin compared to placebo. Secondary endpoints evaluated included duration of oral mucositis, patient self-reported pain score, use of pain medications, the incidence and duration of febrile neutropenia, and use of enteral or parenteral nutrition.

Complete results will be presented in December at the American Society of Hematology annual meeting in Atlanta.

Shares of CuraGen (NASDAQ:CRGN) fell 50 cents, or 34.5 percent, to close at 95 cents.