November 6, 2014 / 1:32 PM / 4 years ago

UPDATE 2-Aeterna hits record low after FDA rejects growth hormone test

* FDA says not enough “verifiable” data, asks for fresh trial

* FDA says drug could have led to a cardiac event in trial

* Canaccord cuts drug’s success chance to 40 pct from 85 pct

* Toronto- and U.S.-listed stock fall over 50 percent (Adds detail, analyst comment; updates shares)

Nov 6 (Reuters) - Canada’s Aeterna Zentaris Inc said the U.S. Food and Drug Administration rejected macimorelin, which the drugmaker had hoped would be the first orally administered drug to determine if adults had growth hormone deficiency.

The company’s Toronto-listed and U.S.-listed shares both fell by more than half to record lows on Thursday.

An analysis showed the company’s key trial did not meet its main efficacy goal and there was not enough “verifiable” data used to diagnose adult growth hormone deficiency (AGHD), the FDA said in a complete response letter to Aeterna.

The agency also said the drug’s involvement in a serious cardiac event during the trial could not be ruled out and asked Aeterna to conduct fresh trials to demonstrate the effectiveness and safety of macimorelin.

Canaccord Genuity slashed its estimate of the drug’s chances of success to 40 percent from 85 percent, based on its enhanced risk profile, and said the launch has likely been pushed out by about four years.

“A new clinical pathway for Macrilen (macimorelin) could require substantial time and capital that Aeterna may be unwilling to invest,” analyst Neil Maruoka wrote in a note.

AGHD is typically diagnosed using an insulin tolerance test. This involves injecting insulin to lower blood sugar levels, stressing the body to release growth hormones. A failure to secrete enough is a positive diagnosis for AGHD.

Macimorelin was designed to work in a similar manner, except that it would be orally administered rather than injected.

AGHD is characterized by reduced energy levels and muscle strength, osteoporosis, lipid abnormalities as well as impaired cardiac function. It affects about 75,000 adults across the United States, Canada and Europe.

Quebec-based Aeterna is also testing macimorelin for use in cancer-induced cachexia, a physical wasting characterized by the loss of weight and muscle mass.

The company’s U.S.- and Toronto-listed stocks fell about 56 percent in morning trading. The stock was down 47 percent at 68 cents, after hitting a low of 57.2 cents earlier on the Nasdaq.

Canaccord chopped its target on the shares to 80 cents from $1.45. The Nasdaq-listed stock has had a volatile year and ended Wednesday down 6.5 percent since the start of the year. (Reporting by Natalie Grover in Bangalore; Editing by Savio D’Souza)

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