MS drug fails; stock plunges

From The AP:

ALAMEDA, Calif. - Biotechnology company Avigen Inc. said Oct. 21 its multiple sclerosis drug candidate failed in a mid-stage study.

The announcement sent shares plummeting in afternoon trading. The stock fell $2.72, or 82 percent, to 58 cents. Earlier in the session, shares hit 53 cents apiece, their lowest point in at least a decade.

Multiple sclerosis is an autoimmune condition in which the immune system attacks a person's own central nervous system. The company said AV650 failed to meet its main goal of improving spasticity, or the tightening of muscles, when compared with placebo. The study involved up to 150 patients.

Avigen (nasdaq: AVGN - news - people ) said it is continuing to review additional data from the study and is considering its options.

At the end of 2008, Avigen said it will have about $50 million in cash and securities, or about 2 years of cash left.