Dipexium Pharmaceuticals Inc. (NASDAQ: DPRX) is watching its shares in free fall on Tuesday after the company announced data from its late-stage trial. The question on everyone’s mind is whether or not this is the end for Dipexium, after suffering such a loss.
As we have said time and again, clinical trials and FDA decisions have the potential to make or break companies in this industry. For the month of October, a few of these companies have been on the move, and a few more expect results or decisions later this quarter.
Specifically, Dipexium announced that its OneStep-1 and OneStep-2 Phase 3 clinical trials of Locilex (pexiganan cream 0.8%) in patients with mild infections of diabetic foot ulcers (Mild DFI) did not meet the primary clinical endpoint and also did not show any meaningful difference in wound closure rate.
Neither trial met the secondary endpoint of demonstrating a higher rate of eradication of bacteria for the Locilex arm. While the overall adverse event incidence was comparable to vehicle alone, serious adverse events with Locilex included higher than anticipated osteomyelitis and cellulitis in the Locilex arm of each study.
Looking at the books, we can see that this company has a cash burn rate of anywhere between $5 million to $6 million each quarter. In its June quarter the company reported that it had $22.78 million in total current assets with the majority in cash, cash equivalents, and short-term investments.
By the looks of it Dipexium may only last another year at its current burn rate, unless it raises more capital from investors or manages to push through a trial. Either way this would take a compelling event in its pipeline, unlike what we have seen on Tuesday.
David P. Luci, president and CEO of Dipexium, commented:
Although we are disappointed with these results, we are continuing to evaluate the data and will consider potential regulatory pathways forward in other possible clinical indications based on an evaluation of all data emerging from the Phase 3 studies.
Shares of Dipexium were last trading down about 78% at $2.80, with a consensus analyst price target of $27.25 and a 52-week trading range of $1.90 to $17.75.