CoCensys Stock Falls 25% After Drug Development Pact Ends
IRVINE — CoCensys Inc. stock fell 25% Tuesday after Swiss drug-maker Novartis AG ended an agreement to develop a compound to treat stroke and traumatic brain injuries.
Shares of the Irvine biotechnology company dropped 93.75 cents to $2.875 a share in Nasdaq trading.
Novartis withdrew from developing the compound--called ACEA 1021--after results from initial safety trials showed crystals of the drug in the urine of some subjects, the companies said in a joint statement. Such crystals can cause abdominal pain and damage kidneys.
CoCensys said it plans to hold off on the next round of tests until it finds a new partner. The companies jointly spent $21 million to develop ACEA 1021, a CoCensys spokeswoman said.
CoCensys, which develops and markets products to treat neurological and psychiatric disorders, regains all rights to the experimental drug. It will pay back Novartis up to $5 million in development costs only from future sales of the drug should it ever be marketed, the spokeswoman said.
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