What happened

Shares of Bellus Health (NASDAQ:BLU) (TSX:BLU) were falling 69.2% at 2:40 p.m. EST on Monday following its announcement that a phase 2 trial of BLU-5937 as a treatment for refractory chronic cough has missed its mark.

So what

The biotech company says millions of patients suffer from chronic cough despite existing treatments, including Merck's (NYSE:MRK) gefapixant, a P2X3 antagonist associated with a side effect of taste loss that's hindered its use.

A man rests his head on the keyboard of his laptop.

Image source: Getty Images.

Although BLU-5937 similarly targets P2X3, it was specifically designed to reduce the likelihood of taste loss. Unfortunately, BLU-5937 wasn't able to outperform placebo when it came to reducing the frequency of cough while awake in its phase 2 study. 

The company tried to put a positive spin on missing the primary endpoint on its study, though. It said BLU-5937 delivered a statistically significant and clinically meaningful benefit in patients with hourly cough counts that were at or above the median number of coughs across all participants. 

Bellus also reported BLU-5937's safety was on par with placebo and that it had a "low impact on taste perception."

Now what

The phase 2 trial is disappointing for investors in Bellus given BLU-5937 is its only drug in clinical trials. The long-shot hope could be that management is able to launch another study comprising patients with high cough counts that pans out, but there's no telling if or when such a trial would actually begin enrolling anyone. 

Therefore, investor attention shifts toward studies of BLU-5937 in eczema patients suffering chronic itch. A phase 2 trial in that indication was expected to begin enrolling patients already, but enrollment was paused because of COVID-19 concerns.

Management hopes to begin enrolling its eczema trial before the end of 2020, but given the miss in chronic cough and uncertain timeline, investors are probably best off focusing on other ideas.