Shares of Auxilium Pharmaceuticals Inc. fell Wednesday as investors mulled mixed results from the drug candidate Xiaflex in a midstage study focused on Peyronie's disease, or penile curvature.
The company said the drug candidate improved the condition in 29.7 percent of patients after 36 weeks, compared with 11 percent of patients taking placebo. Still, the company said there were no statistically significant results in the drug's effectiveness at reducing patients' pain and discomfort during intercourse.
Shares of Auxilium fell $1.76, or 5.4 percent, to $30.74 in afternoon trading. The stock has traded between $21.85 and $37.28 over the last 52 weeks.
Peyronie's disease involves the growth of plaques in the soft tissue of the penis, causing hardened lesions and in turn, abnormal curvature of the penis when erect. The condition is estimated to affect up to 4 percent of men.
Auxilium expects to meet with the Food and Drug Administration during the second quarter of 2010 to discuss a proposed late-stage study.
Meanwhile, the Malvern, Pa., company is waiting for an FDA decision on Xiaflex approval for an arthritis-like condition of the hands called Dupuytren's contracture.
Leerink Swann Research analyst Joseph P. Schwartz called the move to drive down shares a "knee-jerk reaction" to a lack of statistically significant data in several parts of the study.
"We are encouraged that Xiaflex showed improvement in both a sign and a symptom of Peyronie's disease, as measured by angle of curvature and Peyronie's disease bother," he said, in a note to investors. "This is what the FDA requires at a basic level for any drug to demonstrate efficacy sufficient for approval."
He reaffirmed an "Outperform" rating and a $40 price target.
He said shares could regain some ground "as people realize that there is a reasonable path forward in this horrific disease, which has only surgery with terrible outcomes."