Durect Corp. said Monday its pain patch failed in a midstage clinical trial focusing on chronic lower back pain, sending shares plummeting in after-hours trading.
The stock fell 85 cents, or 24.3 percent, to $2.65 in after-hours trading after gaining 5 cents to close at $3.50 during the regular trading session.
The study on the Eladur pain patch was conducted by the company's partner, King Pharmaceuticals, which is now part of Pfizer Inc.
Durect said Eladur did not meet its goal of reducing pain intensity in the 263-person study. The study compared the potential pain patch with a placebo.
Durect has already received $20 million in upfront payments since originally signing a license agreement on the drug in 2008. It is entitled to potential payments of up to $93 million based on development and regulatory goals and up to $150 million on sales based goals if the drug candidate is approved.
Durect has faced regulatory difficulty with its other potential pain drug, Remoxy. That drug is aimed at being abuse-resistant and is under FDA review, though the agency has held up reviews in the past to request more proof that it cuts down on abuse. Durect licensed Remoxy to Pain Therapeutics in 2002, which in turn sublicensed rights to King Pharmaceuticals.
Remoxy is similar to Purdue Pharma LP's OxyContin. Both are designed to treat pain by slowly releasing the narcotic oxycodone. But Remoxy is designed to avoid easily being crushed or dissolved. The time-release mechanism on OxyContin can be defeated if the drug is crushed or dissolved, allowing users to get a sensation similar to what they can get from heroin.