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Why the Bionomics Ltd (ASX:BNO) share price crashed 69% lower today

It certainly has been a disappointing day for shareholders of clinical stage biopharmaceutical company Bionomics Ltd (ASX: BNO).

In morning trade the Bionomics share price has returned from its trading halt and crashed a whopping 69% lower to a 52-week low of 15.5 cents.

Why have Bionomics’ shares crashed lower today?

This morning Bionomics’ shares returned to trade following the results of its phase 2 clinical trial of its BNC210 novel drug candidate in patients with Post Traumatic Stress Disorder (PTSD).

As you may have guessed from the share price reaction, the results fell well short of expectations.

According to the release, the trial comprehensively assessed symptoms in 193 patients with PTSD across 25 sites in the both the United States and in Australia.

While the study found that BNC210 showed excellent tolerability and safety, the trial did not meet its primary endpoint of a decrease in PTSD symptoms as measured by Clinician-Administered PTSD Scale (CAPS-5) at 12 weeks.

CEO and managing director, Dr. Deborah Rathjen, advised that:

“We are extremely disappointed that the primary endpoint in this trial was not met. As we move forward we will focus on the completion of the ongoing Phase 2 trial of BNC210 in hospitalised, elderly patients suffering from agitation which is anticipated to readout in Q1, 2019. We plan to stop all other work on BNC210 until that time. In FY18 Bionomics reduced costs by closing the US operations and reducing overall headcount. In order to maintain and enhance shareholder value, we are continuing to assess our strategic options for partnering and portfolio prioritisation whilst conserving cash.”

Although the company does have a pipeline of products under development, BNC210 was seen by many, myself included, as the star of the show.

The fact that BNC210 has been ineffective in this study and that management has suspended all future work on the novel drug, doesn’t fill me with confidence that it will ever make it to market.

All being well, one of the company’s other candidates will be a success. But until then I would suggest investors stay clear of the company and consider large cap alternatives such as CSL Limited (ASX: CSL) and Mayne Pharma Group Ltd (ASX: MYX).

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