(Rewrites, adds more comment, detail and updated shares)
Jump to full article: Reuters, 2009-10-16
Author: Sam Cage
Intro: Cytos Biotechnology's (CYTN.S) anti-smoking vaccine missed its main target in a mid-stage study, making it highly unlikely the product will reach the market and slamming the Swiss group's shares.
The Swiss start-up drug discovery group, which does not yet generate sales of its own products, will now probably miss out on a milestone payment by partner Novartis (NOVN.VX) and analysts said it would struggle to finance itself and pay debt.
"We see the company's prospects not only built on shaky scientific ground, as we have discussed it repeatedly over the past years, but also its financial foundation appears very fragile," said Olav Zilian, analyst at Swiss brokerage Helvea. . . .
Novartis bought the rights to the Cytos NIC002 anti-smoking vaccine in 2007 in a deal valued up to 600 million francs, including an upfront payment of 35 million francs, with further payments contingent on development milestones.
The vaccine aims to help smokers kick the habit by preventing nicotine from entering the brain, depriving them of the satisfaction many associate with smoking.
Novartis has now informed Cytos that the vaccine failed to show a statistically significant difference in continuous abstinence from smoking determined from weeks eight to 12 after start of treatment, compared with a placebo.
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