On October 26, 2006, shareholders abandoned Renovis Inc. after the Company announced that its novel free radical trapping neuroprotectant, NXY-059, did not meet efficacy endpoints in a pivotal Phase III Trial for Acute Ischemic Stroke. As NXY-059 was the Company’s most advanced product candidate, news of the setback sent the price of the Common Stock plummeting 75.8% in active trading (to close at $3.43).
At the time, some investors (and equity analysts) thought the loss in market valuation excessive. The Company was in reasonably sound financial health with $104.73 million, or $3.57 per share, in cash and cash equivalents (as of June 30, 2006).
Renovis has an active pain and inflammatory diseases research program. Its most advanced drug discovery program is focused on small molecule compounds that inhibit a molecular gateway to the pain pathway, called the vanilloid receptor, VR1, with the objective of developing a new class of treatment for inflammatory pain, neuropathic pain, and other neurological disorders.
In May 2005, Renovis entered into a two-year agreement with Pfizer to combine respective drug discovery efforts surrounding VR1. Pfizer has the option to extend the agreements for up to two additional years (subject to specific progress of the VR1 collaboration and additional funding requirements).
In addition to its VR1 Antagonist Program, Renovis is also pursuing novel molecules called purinergic receptor inhibitors (which have potential as broad-spectrum analgesics and anti-inflammatories). The Company, however, has no product candidate currently beyond the initial research stage.
Today, the share price of Renovis closed at $3.10—showing us that cheap can get cheaper.
Editor David J Phillips does not own any of the stocks mentioned in this article. The 10Q Detective has a full disclosure policy.