Canada’s Neurochem has seen its stock take a bashing for the second day running as the news that the firm’s investigational Alzheimer’s treatment has failed a late-stage trial takes effect.

The stock closed down 26% on the US Nasdaq on Tuesday to $2.34 as the firm issued a statement concerning its cash position, following the announcement a day earlier that Alzhemed (tramiprosate) failed to show any clinically significant effects in treating Alzheimer's disease in a Phase III North American trial. That news caused a 43% slide in the stock.

The Laval, Quebec-headquartered firm said that “due to significant interference from high between-site variations that complicated the statistical analyses beyond expectations”, it is not possible to draw definitive conclusions from the trial but the US Food and Drug Administration has told the company that the data provided, or adjustments suggested by the firm, will not be enough to support a claim of effectiveness. However Neurochem said that the agency has told it that the data could be used to modify an ongoing European Phase III trial, so the Alzhemed programme may still have some life left.

Neurochem, while saying that it “does not provide guidance regarding financial matters”, stated that at the end of July, it had cash reserves of approximately $80 million, which should last for 15-18 months. However it has set up a special advisory board to look at Alzhemed and this, plus “other upcoming milestone events, make it impossible to predict with certainty the company's cash requirements at any point in time”.

Analysts seem to have made up their minds however and Annabel Samimy at UBS issued a note saying that “we have little faith that guidance from the advisory board and adjustments to the European Union trial will be sufficient to save the Alzhemed programme." She added that the latter will likely go the way of Neurochem's Kiacta (eprodisate) for the treatment of amyloid A amyloidosis. The firm received a second approvable letter from the FDA for the drug and UBS, which has dropped its price target on the stock to $1 from $4.50 sees no future for Kiacta.