Shares of Myriad Genetics Inc. fell Monday morning after the company said it will end development of Alzheimer's disease drug candidate Flurizan, after it proved no better than placebo in a late-stage trial.
Patients who took Flurizan did not experience significant improvement in cognition or performing daily activities.
In early trading, shares sank $3.11, or 6.5 percent, to $44.83 on more than five times average trading.
Myriad shares rose in mid-June after Elan Corp. PLC and Wyeth reported positive results for their Alzheimer's drug candidate, bapineuzumab. But many analysts had expected the Flurizan trial to be less successful, and on Monday they attempted to evaluate Myriad's value without the drug candidate.
Citi analyst Lucy Lu said she thinks the company's core molecular diagnostics business is worth $50 per share. She maintained a "Hold" rating on the stock. Cowen analyst Ian Sanderson said the stock could trade in the low $40-range, and Michael Yee of RBC Capital Markets predicted a "near-term valuation floor" of $37 per share.
Lu had said there was less than a 10 percent chance the trial would be successful, and Sanderson was only slightly more optimistic.
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