Shares of Neumora Therapeutics closed down more than 17 percent Monday after the Watertown biotech said the Food and Drug Administration had put a clinical hold on its early-stage study of its experimental schizophrenia drug.
Regulators paused the trial after data revealed that rabbits dosed with the drug experienced convulsions. About 30 people in the study have received the medicine, whose laboratory name is NMRA-266, with no evidence of convulsions observed in any participant, according to the company.
“We are disappointed with the unanticipated safety findings in rabbits and are discussing next steps with the FDA,” Henry Gosebruch, president and chief executive of Neumora, said in a statement.
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The drug targets so-called muscarinic receptors in the brain in an effort to treat schizophrenia, a severe mental disorder that can result in hallucinations, delusions, and disordered thinking and behavior.
Myles R. Minter, an analyst with William Blair, called the clinical hold “obviously disappointing,” particularly because the treatment represents “one of the most exciting novel drug classes” for diseases of the central nervous system.
Two other Massachusetts drug companies, Karuna Therapeutics and Cerevel Therapeutics, have been using a similar approach to treat schizophrenia. Promising clinical trial results prompted Bristol Myers Squibb to strike a deal in December to acquire Karuna for $14 billion and spurred AbbVie to cut a deal to buy Cerevel for about $8.7 billion the same month.
Another analyst, Brian Abrahams, of RBC Capital Markets, said Neumora’s schizophrenia drug likely faces “a challenging road ahead” with the FDA. Nonetheless, he said, the absence of convulsions in the study’s 30 human volunteers “could give [Neumora] an argument” to lift the hold.
Neumora was founded in 2019 and in September became the second Massachusetts biotech to go public in 2023 amid the sector’s severe business downturn.
The company, backed by California drug maker Amgen and Japan’s SoftBank, had hoped to raise up to $265 million from investors but ended up raising only $250 million in the initial public offering. The stock sale left Neumora with a market value of about $2.5 billion; that had fallen to about $1.8 billion Monday morning.
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The schizophrenia drug is one of seven experimental medicines in Neumora’s pipeline of potential treatments for brain diseases. The other compounds included drugs for bipolar depression and for agitation linked to Alzheimer’s disease.
Another of its experimental drugs is in late-stage studies for major depressive disorder, according to the company’s news release.
This story has been updated.
Jonathan Saltzman can be reached at jonathan.saltzman@globe.com.