Shares in Cadence Pharmaceuticals sank almost 62% after the San Diego-based firm announced that a late-stage trial of Acetavance failed to meet its primary endpoint.

The company revealed results of two out of four Phase III clinical trials of Acetavance (acetaminophen) for intravenous use and one of them failed to demonstrate a statistically significant reduction in patients' pain intensity levels over 48 hours compared to placebo, following abdominal gynaecologic surgery. The study involved 331 patients enrolled at 27 sites.

However, the company was looking on the positive side and noted that the study successfully achieved “several secondary endpoints, including pain relief, global patient satisfaction and time to rescue medication”. Cadence also announced that a Phase III 60-patient trial of Acetavance in fever successfully met the primary endpoint, demonstrating a statistically significant reduction of fever over six hours compared to placebo.

James Breitmeyer, chief medical officer at Cadence, said that the drug did not meet its primary endpoint in the first trial “because of substantially higher than predicted variability in pain intensity scores”. He added that the firm remained confident about the design of the study but “we will request a meeting with the US Food and Drug Administration to obtain the agency's advice regarding our development programme".

Chief executive Ted Schroeder was equally enthusiastic, saying that “based on the excellent safety results and the positive secondary endpoints…we remain firmly committed to continuing the development of Acetavance” in both acute pain and fever. He added that this confidence is supported by “other successful post-operative pain trials of intravenous acetaminophen and the product's strong position as the market leading injectable analgesic in Europe”. Over 200 million doses have been sold since the product was launched there in 2002 by Bristol-Myers Squibb.

In the fourth quarter, Cadence initiated enrolment in a Phase III trial of Acetavance for the treatment of mild-to-moderate acute pain in adults following abdominal laparoscopic surgery. However, the most lucrative indication is that of abdominal gynaecologic surgery and investors who do not share Mr Schroeder’s confidence led the share price to sink to $5.36.