Shares of Icagen Inc. plunged 73.6 percent Friday following news that an independent Data Monitoring Committee recommended the company stop treating half the patients in a Phase III trial of ICA-17043 for sickle cell disease.

Falling $3.12, the stock (NASDAQ:ICGN) ended the day at $1.12 - setting a new 52-week low for a company that priced at $8 its initial public offering of 5 million shares only 18 months ago.

The DMC found no specific safety issues with the trial in its interim analyses, but suggested that the company continue enrolling only those patients receiving concurrent hydroxyurea, an antineoplastic drug used in hematological malignancies. For patients not on hydroxyurea - about 50 percent of those enrolled so far - the DMC recommended the drug be discontinued and that patients proceed to the end of the follow-up period.

Analyst Bret Holley, of New York-based CIBC World Markets, downgraded the company's stock from "sector outperform" to "hold" based on the news.

"It's certainly a pretty serious question now exactly what the activity of 17043 is in the setting," Holley told BioWorld Today. "It suggests, as a single agent, the drug didn't have adequate activity to get over the line in the Phase III."

Approximately, 10 percent to 20 percent of the 100,000 sickle cell anemia patients in the U.S. are taking hydroxyurea, indicating a much lower market potential for ICA-17043 than was previously thought.

"They're really only a fraction of the patients," Holley said.

But Icagen President and CEO Kay Wagoner said a larger percentage of patients being enrolled in the Phase III trial, as opposed to the general patient population, were taking hydroxyurea because the protocol called for more severely ill subjects.

The trial, called ASSERT (A Stratified Sickle Event Randomized Trial), began in February 2005, only a few weeks after Icagen conducted its $40 million IPO. (See BioWorld Today, Feb. 4, 2005, and Feb. 23, 2005.)

The randomized, double-blinded, placebo-controlled study has enrolled about 75 percent of the planned 300 patients between the ages of 16 and 65. Eligible patients are those who have had at least two vaso-occlusive crises within the previous 12 months. The primary endpoint is vaso-occlusive crisis rate; a secondary endpoint is assessing hemoglobin levels.

Patients are being treated for one year at 65 sites across the U.S. and other countries selected by Icagen's partner, McNeil Consumer & Specialty Pharmaceuticals, a unit of New Brunswick, N.J.-based Johnson & Johnson. Icagen and McNeil formed their 50/50 profit-sharing and co-promotion agreement for the U.S. market in June 2004. McNeil also pays for all ex-U.S. development, and Icagen is entitled to a royalty on international sales.

Icagen officials believe McNeil remains committed to the product, despite a termination provision in the contract.

In a conference call, Wagoner said she is confident that the protocol modification is in the "best interest of maintaining the integrity" of the clinical trial, but she declined to speculate on the DMC's rationale for its recommendations, saying "we remain completely blinded to the data."

The DMC is scheduled to meet again in the third quarter, at which time Icagen expects to receive further guidance on the size of the trial. As of now, the remaining 25 percent of patients to be enrolled will include only those taking hydroxyurea, said Seth Hetherington, Icagen's senior vice president of clinical and regulatory affairs.

The data reviewed were available in mid-April and "represent only one-quarter of the anticipated data" at the end of the protocol, he said.

A Phase II study of ICA-17043 met its primary endpoint, the change in hemoglobin level from baseline, at a 10-mg dose. That increase was accompanied by a corresponding increase in hematocrit and red blood cell count, dense red blood cells, reticulocyte count, LDH and indirect bilirubin.

"We based our Phase III study on the Phase II results where patients taking and not taking hydroxyurea participated," Hetherington said, "and both groups demonstrated hematological benefits of ICA-17043.

"That said," he continued, "sickle cell disease is a very complex disease. It has different phenotypes, and it may be very possible that we could see additive, synergistic or no difference and effect when combining two or more medications."

Wagoner stressed that the company is exploiting other indications with ICA-17043, including a pediatric program that began a 28-patient study in May for sickle cell disease, as well as a pulmonary arterial hypertension indication.

The company ended the first quarter with about $42 million in cash and estimated a burn rate of between $27 million and $31 million this year.

Beyond ICA-17043, Icagen has preclinical compounds for epilepsy and neuropathic pain, as well as one for atrial fibrillation that is partnered with New York-based Bristol-Myers Squibb Co., and another for dementia partnered with Astellas Pharma Inc., of Tokyo. The Astellas partnership also produced lead compounds that Icagen is developing for attention deficit hyperactivity disorder.