Australian investors, reacting today to news that Osprey Medical (ASX:OSP) failed to meet a key endpoint in a clinical trial, took OSP shares down by some -55% today.
The plunge came despite news that the FDA approved expanded claims for Osprey’s Avert device, which is designed to reduce and monitor the amount of contrast agent injected during angiographic heart and peripheral vascular imaging procedures. Avert won 510(k) clearance from the FDA in August 2014 under a”controlled infusion of dye” indication and soon began a clinical trial aimed at expanding the indication to include “reduction of contrast-induced nephropathy” in angiography or stenting patients.
But the trial failed to show a significant difference in contrast-induced nephropathy between the cohort treated with Avert and the control group, the Melbourne-based company said today.
That prompted a massive selloff that sent OSP shares down -55.2% to a close of just A30¢ apiece today on the Australian stock exchange.
The company vowed to expand a pilot sales program it started in Texas by hiring another 5 direct sales reps before the end of the year and said it’s fielded interest from “2 leading medical device companies” for worldwide sales & marketing rights for its its line of dye-saving devices.
“The company will access this inbound interest prior to scaling up its sales force to 20 reps in 2016,” Osprey Medical said.
“We are thrilled to have gained FDA clearance for the expanded marketing claims for dye reduction, image quality and reflux reduction. Osprey’s product is now the only device available with an FDA-cleared indication for dye volume reduction that allows practicing physicians to achieve the medical guidelines currently established for at-risk kidney patients,” added president & CEO Mike McCormick in prepared remarks.
“Successfully achieving clearance of these expanded marketing claims marks an important milestone for the company. We are now in a position to aggressively accelerate our U.S. commercialization efforts by expanding beyond our current sales pilot program in Texas. We are proud to continue our mission of protecting kidneys from the harmful effects of contrast media and look forward to moving into full U.S. commercialization,” McCormick said.
Just last week, investors were cheered by the news of FDA 510(k) clearance for Osprey’s DyeVert contrast modulation system, sending shares of the company to a nearly 2-month high.