Cytos Biotechnology Shares Slump As Nicotine Trial Fails

Cytos Biotechnology Ltd (CYTN.EB) shares slid in early trade Friday after the company said late Thursday that its anti-nicotine addiction trial failed to meet its endpoint.

At 0720 GMT, Cytos' shares were down CHF9, or 40%, at CHF13.45.

Cytos, which has partnered out the compound NIC002 to treat nicotine addiction to Swiss pharmaceutical company Novartis AG (NVS), said the target of the study was to increase the time until smokers who quit smoking relapse into the habit.

Novartis will continue with the trials, but a positive outcome is unlikely, says Helvea analyst Olav Zilian.

Cytos has a technology to develop special kinds of vaccine that treat chronic diseases, using a method that targets the cause of the disease and modifying the disease's progression rather than just suppressing its symptoms.

But the processes are complicated and some analysts say Cytos needs more money to better investigate and understand its novel approach.

The Schlieren, Switzerland-based company, still has two compounds in its late stage pipeline. One is to treat allergies and the other one to ease hypertension.

Cytos also is in a partnership with Pfizer Inc. (PFE) on undisclosed human and animal health applications.

Company Web Site: www.cytos.com

-By Julia Mengewein, Dow Jones Newswires; [phone]; [e-mail]