Cardica (NSDQ:CRDC) shares fell more than 20% today after the company said it halted enrollment in a European clinical trial of its MicroCutter XPress 30 because the device "did not perform satisfactorily in thicker tissue" in a small number of cases.
There were no adverse events associated with the problem, but Cardica will have to modify the device, according to a press release.
"Cardica has re-prioritized the development activities of its MicroCutter product line to emphasize the development of the MicroCutter XChange 30. In addition to the acceleration of development for the XChange 30, the company intends to pursue modifications of the XPress 30 concurrently," according to the release. "In light of Cardica’s limited financial resources, Cardica has suspended development of other potential products in its planned microcutter product line until the development of XChange 30 has been completed and additional financial resources have been obtained."
The company said it hopes to continue the trial by the end of the first quarter, using the XChange 30, "once this device completes development and design verification, and Cardica is able to apply CE Mark to the device."
"We are disappointed that the XPress 30 did not perform as well as we expected in the upper range of tissue thickness but understand and are confident we can make the changes needed to enhance performance. In the interim, the XChange 30 will allow us to resume trial enrollment in the near future while also providing Cardica with a readily marketable product that is substantially smaller with significantly enhanced articulation range," president & CEO Dr. Bernard Hausen said in prepared remarks. "At this time, we believe that rapidly advancing our smallest, cartridge-based device, the XChange 30, through development and into a clinical trial, while addressing the underlying issue with the XPress 30, will allow us to reach the European and US markets with our premier product in the most efficient manner."
Cardica shares were down 21.2% to $1.61 as of about 12:20 today.
The company surged to first-quarter profitability last November, posting profits of $6.2 million, or 25 cents per share, on sales of $10.0 million during the three months ended Sept. 30. Later that month Cardica reached a $2 million milestone for the MicroCutter laparoscopic stapling device.