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AVI Biopharma plummets despite positive study

WASHINGTON (AP) -- Shares of AVI Biopharma Inc. plummeted Monday after the company said its experimental muscular dystrophy drug did not help patients walk, despite a significant increase in the protein that strengthens skeletal muscle.

Shares of the Bothell, Wash.-based company fell 39 cents, or 25.4 percent, to $1.15 in midday trading.

The company said patients with muscular dystrophy who received a weekly regimen of etepliersen for 24 weeks saw a 22.5 percent increase in dystrophin-containing muscle fibers. The most common form of muscular dystrophy, which primarily affects boys, is caused by a lack of the protein dystrophin.

Despite this positive biological measure, patients did not show significant improvements in actual clinical measures, including a six-minute walking test. The mid-stage trial data is based on a study of 12 boys.

"We anticipate that these levels of dystrophin could lead to significant clinical benefit if maintained over a longer course of treatment," said Jerry Mendell, director of the Centers for Gene Therapy and Muscular Dystrophy at Nationwide Children's Hospital and principal investigator of the study.

AVI Biopharma, a development-stage company, has no products on the market.

Piper Jaffray & Co. analyst Edward Tenthoff called the results an "encouraging proof-of-concept," in a note to investors Monday. He holds an "Overweight" rating on the stock and raised his price target to $2.50 from $2.