Auxilium Pharmaceuticals Inc. (AUXL) shares fell 8% Thursday after the company said it has to suspend dosing in a Phase III trial of a drug for the treatment of Dupuytren's contracture, a rare hand deformity, due to a manufacturing issue.
Dupuytren's contracture, which usually occurs in white adults in their 50s and 60s and is currently treated by surgery, can cause the fingers to bend towards the palm, and is caused by a thickening of the skin of the palm.
Late Tuesday, the company said it was temporarily stopping the dosing of patients in its ongoing Phase III trials for its AA4500 drug, and will conduct an investigation into the problems, which it believes are due to a higher-than-expected moisture content within some vials used to store the drug, possibly because of faulty equipment.
Shares of the company were recently changing hands at $14.68, down $1.28, or 8%, with around 1.3 million shares traded, more than three times average daily volume.
Auxilium's drug is unique in that it is a non-surgical approach. Currently there is no cure for the problem, and surgery doesn't prevent a recurrence. Injectable enzymes can break down the knots and cords of the hardened tissue.
The company said during a conference call that it has notified the U.S. Food and Drug Administration before re-starting the clinical trials and expected the FDA to take around 30 days to review the data. Management said it was uncertain whether it would have to create a new batch of drugs for the trials, adding investigators will continue to monitor patients already dosed in the trials.
Piper Jaffray said a delay could push back its launch timeline for late 2008, but may not have an impact on Auxilium's exclusivity for the drug, as Auxilium has orphan-drug protection - which is granted for drugs that treat rare diseases - for seven years in the U.S.
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