CuraGen Corp. told investors Thursday it will postpone trials on a key drug now in development, prompting a 17 percent plunge in the share price to a 52-week low.
Shares of the New Haven, Conn., pharmaceutical company closed the day at $10.70, down $2.12, on the Nasdaq Stock Market. The previous 52-week low of $12.70 was set Monday.
James Rosen, analyst at Brean Murray, downgraded CuraGen to hold from buy Thursday, noting that delaying trials of its CGT53135 inflammatory bowel treatment may mean that the company will have no drug candidates in clinical trials by year’s end.
“This increases the risk associated with holding the shares, and lengthens the wait in an already long-term story,” Rosen said in a note.
But analyst Todd R. Nelson of RBC Capital Markets remained upbeat.
“We’re optimistic in the long term, and the value remains attractive,” Nelson said.
CuraGen’s director of drug development, Henri Lichenstein said the company expects to submit its initial investigational new drug application to the Food and Drug Administration within six to 12 months.
Lichenstein said the company’s revised timetable allows for more rigorous preclinical testing and analysis. The process “may ultimately save time, improve the odds for success and potentially reduce costly, later-stage clinical failures,” Lichenstein said in a statement.
But Rosen, the Brean Murray analyst, said the action “sends a negative signal” to investors that may raise questions about the company’s ability to get products into clinical testing.
CuraGen posted a first-quarter loss Thursday of $19.6 million, or 40 cents a share, on revenue of $4.8 million.