Biotech company Actinogen Medical (ASX: ACW) has announced results from the Phase II clinical trial of its Alzheimer’s treatment.

It’s been a long time coming for markets, after the company raised millions of dollars based on the promise of its Xanamem drug.

This morning, Actinogen confirmed that a 10mg dose of its Xanamem treatment is safe. However, it’s not effective.

“Xanamem at 10mg did not demonstrate adequate efficacy in improving cognition in mild Alzheimer’s disease,” Actinogen said.

The market’s verdict? ACW crashed by almost 70 per cent to a new low of 1.6 cents.

When safety just doesn’t cut it

Actinogen tried to put a positive spin on the news, stating that the results offer “great encouragement” to pursue studies at higher doses.

But clearly, the market was looking for effectiveness at 10mg, not just safety. Prior to today’s tumble, the stock price traded consistently at between five and eight cents for two years — an indication that the latest clinical trial was a bit of a watershed moment as far as investors were concerned.

The company said its development program for higher dosages of the Xanamem treatment remain ongoing.

Early testing for dosages of 20mg and 30mg are in the works, which will provide indications around both safety and impact on cortizol production in the brain.

“Initial results from these studies are expected to read out by the end of June, and will provide important data to further inform and refine Xanamem’s ongoing clinical development program,” the company said.

While the market reaction indicates that this is a significant setback, Actinogen’s March 4C filing shows the company remains well capitalised with $11.29m in the bank, down from $15.50m in December.

In other ASX health news today

Medicinal cannabis company MGC Pharma (ASX: MGC) announced the first shipment of its proprietary CannEpil product has arrived in the UK, and will be distributed among a network of medical doctors. CannEpil is an oral oil product that’s used to relieve symptoms including seizures associated with severe epilepsy cases. Shares in MGC were up six per cent at 5.3 cents.