US biotech Valentis may be forced to put itself up for sale after its lead product, VLTS 934, failed to perform better than placebo in a Phase IIb trial.

The compound has been developed as a treatment for peripheral artery disease, and had already shown positive results in improving exercise in people with PAD in a Phase IIa trial reported at last year’s American Heart Association conference.

“We could find no logical explanation for the difference in performance of the drug group between the two trials," said Benjamin McGraw, Valentis’ chief executive.

"The company has no plans for further development of the product and is assessing strategic opportunities, which include the sale or merger of the business, the sale of certain assets or other actions," he added.

News of the trial failure drove Valentis’ shares down almost 80% yesterday to $0.70.