Shares in Phytopharm have taken a mauling after the UK firm announced the failure of its lead candidate Cogane in a mid-stage trial for Parkinson's disease.

Results from a Phase II trial in unmedicated patients with early-stage PD indicated that Cogane had no beneficial effects on symptoms. Over 400 subjects were randomly allocated to receive either Cogane 60mg, 120mg or 180mg, or placebo, which was taken orally, once-daily for up to 28 weeks, but Phytopharm noted that "no statistically significant effects or trends towards improvement were seen" in any endpoints.

Chief executive Tim Sharpington stated that Cogane had demonstrated encouraging efficacy "in a wide range of industry standard pre-clinical models but this promise has not translated into clinically meaningful efficacy in this study". He added that "we will further analyse these results with our scientific advisors to better understand whether to continue the development of Cogane" and the Lou Gehrig’s treatment Myogane.

Unsurprisingly, Phytopharm has announced "a review of other strategic options", noting that there will no further R&D spend whilst this review is taking place. Investors fear the worst and the company's shares ended the day down 79.5%$ to just 2.05 pence.

Analysts at Edison Investment Research issued a research note stating that Cogane’s future "now looks bleak", adding that they do not view potential development for the drug as a treatment for Lou Gehrig's disease as viable. They added that "the best outcome may be a reverse merger by a private company seeking to utilise Phytopharm’s cash (about £5.5 million), London Stock Exchange listing and £55 million in accumulated tax losses".

Paul Cuddon, an analyst at Peel Hunt, issued a note saying that "we expect the board to review the potential for Cogane and Myogane for other neurodegenerative diseases including motor neuron disease and glaucoma [but] we see limited value in these indications, nor in any other drugs in the pipeline". He went on to state that "the comprehensive nature of the failure raises questions over the relevance of the pre-clinical models used, and the size/expense of the trial that was required to prove that Cogane was futile. Ultimately this outcome should have been reached at a lesser loss for shareholders".

Mr Cuddon concluded by saying that "until companies are better able to select for specific genetically defined patients for targeted drugs, UK pre-revenue drug development companies will remain a lottery".