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Regado Halts Big Heart Drug Trial, Shares Hammered

Regado Biosciences has been trying to show that it doesn’t need Big Pharma to run a massive, pricey Phase 3 study on an anticoagulant drug. But the Basking Ridge, NJ-based company suffered a setback Wednesday when it was forced to suspend the trial pending a review of potential safety problems.

Regado (NASDAQ: RGDO) said that the data safety monitoring board overseeing the study of its anticoagulant, REG1 (now known as Revolixys Kit), has started an “unplanned review” of the trial. The board will conduct a full analysis of the “safety and treatment benefit-risk ratio” of all the 3,234 patients who have been enrolled in the study so far, focusing on serious adverse events due to allergic reactions to REG1.

Because of the board’s move, Regado has stopped enrolling patients in the trial, and will suspend it until the analysis is complete, which should take about eight weeks. Investors immediately pummeled Regado—shares were down more than 38 percent in pre-market trading on Thursday.

This type of news has always been the big risk for Regado, which consciously made a big gamble to run a huge cardiovascular study on its own, believing it could create the most value flying solo. When I spoke with one of Regado’s backers last May, a few months before it went public, he mentioned that it would take something “extraordinarily compelling” for the company to partner its lead program. Indeed, Regado rejected potential partnerships on the way into the IPO queue.

Regado’s big plan is to try to prove that REG1 is better at preventing strokes and other so-called ischemic events in patients undergoing an angioplasty than The Medicines Co.’s (NASDAQ: MDCO) bivalirudin (Angiomax). REG1 is a two-drug system that includes an anticoagulant called pegnivacogin and anivamersen, an RNA aptamer—a string of RNA letters—that binds to pegnivacogin and blocks its activity.

The idea is that by carefully timing injections of each drug a doctor can dial the clot-busting effect up or down in real time during a coronary procedure like an angioplasty. This fine control, Regado says, should make those procedures safer than they otherwise would be. Too much anticoagulation can lead to dangerous bleeding, and none of the other injectable anticoagulants used in such procedures—such as bivalirudin and heparin—have a control agent that can modify their effects.

To test its system, Regado gambled: it chose to run a 13,200-patient study in 500 sites around the world, a job that Big Pharma, and all its financial wherewithal and manpower, is best suited for. That high-risk plan was one of the big reasons Regado had trouble getting out of the IPO gate. Regado has said it expects to pour some $150 million into the trial, and investors were hesitant to buy in during the offering. Regado set a $14 to $16 per share range for its offering, but ultimately priced it at just $4 per share, raising $47 million—all while the IPO window for biotechs was at its peak last August. Regado had to raise more cash subsequently. Now the question is what the data monitoring board will find.

Regado will hold a conference call this morning to discuss the announcement.