(Reuters) - Ventrus Biosciences Inc's experimental drug to treat piles failed in a late-stage trial, and the company said it would stop developing the drug to reduce costs, sending its shares to a life low.
The company's shares were down 55 percent at $5.47, their biggest single-day percentage drop. The stock, which touched a low of $5.28 earlier in the day, was the top percentage loser on the Nasdaq on Monday.
The company, which went public in December 2010, said the drug VEN 309 — its lead product candidate — failed to eliminate bleeding compared with a placebo.
The drug, which was being tested in the late-stage study under an agreement with the U.S. health regulators for the study design, did not show any safety concerns.
Ventrus said it now plans to allocate its resources to complete the development of its drugs for anal fissures, VEN 307, and fecal incontinence.
The New York-based company, which ended the first quarter with $31.1 million in cash and cash equivalents, is "sufficiently capitalized to take the anal fissures drug through a second phase 3 study and to approval," it said in a statement.
The anal fissure cream, which is marketed in oral formulations as a treatment for angina and high blood pressure, met the main goal of reducing pain in a late-stage trial in May.
The company said it expects to meet with the U.S. Food and Drug Administration in the third quarter to decide on a study design for a second late-stage trial of the anal fissure drug.
Data from the second late-stage study, which is expected to cost $12 million, is expected towards the end of 2013, the company said on a call with analysts.
(Reporting by Prateek Kumar and Vidya P L Nathan in Bangalore; Editing by Joyjeet Das, Roshni Menon)