Exopharm (ASX:EX1) share price plunges 17% after animal testing results

The Exopharm (ASX:EX1) share price is sliding today after the company's osteoarthritis animal treatments showed no effect on the rats studied.

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The Exopharm Ltd (ASX: EX1) share price is tumbling today after the company released its preclinical data from its osteoarthritis animal study, showing its two regenerative medical products had no effect on the rats studied.

At the time of writing, the Exopharm share price is down 15.7%, trading at 59 cents after hitting an intraday low of 55 cents.

Exopharm is a biopharmaceutical company focused on developing regenerative medicine. It's currently investigating the therapeutic potential of two products, Plexaris and Cevaris, in treating osteoarthritis.

The company also aims to commercialise exosomes as therapeutic agents. Exosomes are membraneous structures that allow cells to communicate and have the potential to restore dying cells.

Exopharm develops its products using mainly the LEAP (linked engineering and production) process, which involves total control over each step from engineering to manufacturing. 

Exopharm plunges on less-than-exciting results

In today's release, Exopharm advised its study on rodents found 3 key results. Firstly, if a knee joint is too damaged by osteoarthritis and there isn't enough cell tissue remaining to begin restoration, neither Plexaris nor Cevaris have any noticeable effect.

This appears to be the driving force behind the Exopharm share price decline today.

However, the company release also showed that the exosome treatments were "safe and well-tolerated following multiple (4 x weekly) dosing in rodents". 

Exopharm's report outlined that, in conjunction with prior preclinical work, results from this study directed product development to target "mild-to-moderate stage osteoarthritis". 

What Exopharm management said

Exopharm product evaluation head, Dr Angus Tester, said the study results were largely meaningless due to the rats studied.

Initially, we were surprised to see no beneficial effect of either Plexaris or Cevaris over control until we looked at the knee scans. We realised that in this testing, the knee joints were damaged beyond repair, with no obvious cartilage cells available to respond to the exosome treatment.

To accurately evaluate the exosome efficacy, we will need to have a model that has a less severe joint damage as the baseline to gather meaningful efficacy data.

Exopharm share price snapshot

Exopharm insists that the damage it inflicted to the rats' knee joints for the study would, in a human, require a knee reconstruction and therefore surpasses the viability of medical treatment. However, shareholders are clearly concerned that these results may limit the potential efficacy of its treatments.

The Exopharm share price has now fallen 26% this week and 24% this month, after huge gains, saw the Exopharm share price rise from 33 cents in December 2020 to 94 cents in February this year.

Overall, the Exopharm share price is up 271% this past year.

Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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