BioWorld International Correspondent

Sydney, Australia Amrad Corp. Ltd. announced it is abandoning development of Emfilermin in the nerve damage reduction during chemotherapy indication due to poor Phase II results, just weeks after raising A$15.5 million (US$7.9 million).

The news prompted investors to slash 25 percent off the company’s share price cutting it from A$1.19 to A$0.89 on Friday. On Monday, Amrad shares fell another A3 cents to close at A86 cents.

The news that Melbourne-based Amrad would not be proceeding with the development of Emfilermin to reduce nerve damage during cancer treatment drew negative comments among investors and analysts.

An analyst with Salomon Smith Barney, Giselle Roux, said the share placement just weeks before Amrad was due to get a report on the Phase II trial was “bad timing.”

“They didn’t need the money but they still went to the market,” she said.

Other analysts, who declined to be named, commented that the company has yet to achieve a successful product and had been involved in an unsuccessful commercial venture with a diagnostics company that it bought and sold within 12 months.

Media reports in Australia suggested that investors are sufficiently upset by the turn of events, enough so that an attempt to dump the existing management might be made. However, investors and analysts told BioWorld International that the company’s management was comparatively new Managing Director Sandra Webb took over from John Flack less than a year ago. And there have been several other management and board changes.

An Amrad spokeswomen said that the company would not comment on the media reports.

But while Sandra Webb said that the Emfilermin results were “disappointing,” she said the company still has a strong research portfolio.

“We are not a one-throw-of-the-dice biotech company,” she said.

The company had other potential therapeutic possibilities for Emfilermin, including its use to improve the success rates of other IVF treatments a use it was pursuing in conjunction with Serono SA, of Geneva. In addition, the company recently announced a successful Phase I/II trial of a compound it calls AM336, for treating chronic severe pain in cancer patients, and said it would proceed to Phase II trials.

In early March, the company said it raised A$15.5 million from institutional investors, in part to fund the Phase II trials of AM336.

Webb commented that the company simply raised money from the market when it could it had no way of knowing trial results until the report was received.

“Under the study design, results only become known once the trial has been completed,” she said.