Ophthotech Clinical Failure Spurs Massive Layoffs; Stock Rises

Shares of Ophthotech Corp OPHT climbed more than 8 percent after the firm said it plans to cut about 125 to 135 jobs following the failure of Fovista in wet age-related macular degeneration (wet AMD) studies.

In a regulatory filing, Ophthotech said it expects to establish a severance program for affected employees and to substantially complete the job cuts during the first and second quarters of 2017.

In a late stage study, Ophthotech's Fovista plus Genentech's Lucentis failed to show any significant results for treating wet AMD versus treating with Lucentis alone. On the news, shares plunged as much as 86 percent from $38.77 to $5.19 and saw many Street downgrades.

Meanwhile, the company has decided to stop treating patients in its additional clinical trials evaluating the potential additional benefits of Fovista in combination with anti-vascular endothelial growth factor, or VEGF, drugs in wet AMD patients.

However, Ophthotech’s late-stage studies over Fovista along with Regeneron Pharmaceuticals Inc REGN’s Eylea or Genentech’s Avastin versus Eylea or Avastin alone to treat wet AMD is fully enrolled and remains ongoing.

At last check, shares of Ophthotech had risen 6.58 percent on the day to $5.18 on a volume of 7.18 million shares versus its three-month average of 2.30 million shares.