A drugmaker's shares are crashing after its cat-allergy drug failed

Sorry, sniffly cat lovers.
Shares of biopharmaceutical company Circassia plunged 64% in London on Monday after it said its cat allergy drug was no more effective than a placebo.
Circassia was conducting a late-stage trial of the drug, which means it had already shown some promise.

Allergies are your immune system’s response to a substance that may not be harmful to others. Circassia’s treatment is an immunotherapy, which is meant to counter that immune system response and make allergies less severe.

“We are surprised and disappointed by these results,” Circassia’s CEO Steve Harris said in a statement. “Such a dramatic placebo effect was not a feature of our earlier phase II studies. However, in this large-scale trial it eliminated the ability to identify a treatment effect despite dramatic improvements in subjects’ allergy symptoms and rescue medication use.”

The drugmaker makes other allergy treatments, including grass, dust mite and ragweed allergies, all using similar technology, which means this trial results could have major implications on the others. Harris said the next step will be to figure out what went wrong, and what it means for the other ongoing trials.

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