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Tranzyme skids after failure of TZP-102 study

NEW YORK (AP) -- Shares of Tranzyme Inc. plunged about 75 percent Thursday after the company said its diabetic gastroparesis treatment TZP-102 failed in a mid-stage clinical trial.

Tranzyme said that when patients took the drug once per day, it did not work better than a placebo at treating symptoms of the condition. The company said it is "disappointed" with the trial results, but said a second mid-stage trial will continue. In that trial, patients are taking TZP-102 three times a day, once before every meal. TZP-102 is the company's most advanced drug candidate.

Gastroparesis is a condition in which the stomach takes too long to clear out food. Tranzyme said it affects about 12 percent of people with diabetes, and causes nausea, vomiting, dehydration, and difficulty digesting food.

Tranzyme shares dropped $2.99, or 75.4 percent, to 98 cents in afternoon trading. The shares reached an all-time low of 95 cents earlier in the day. Tranzyme, based in Research Triangle Park, N.C., completed its initial public offering in April 2011, and over the last year, its shares had traded between $1.68 and $5.64.

The company's stock tumbled in March after it said its drug ulimorelin failed in a clinical trial. The drug was designed to help patients recover their gastrointestinal function after surgery. At the time, ulimorelin was Tranzyme's most advanced experimental drug.