Aryx shares fall as P&G pulls out of partnership

Aryx shares fell $1.30, or 19.8 percent, to close at $5.27 Thursday. The stock has traded between $3.71 and $9.74 in the last 52 weeks.

"We are surprised P&G would cancel our collaboration after receiving the results of the TQT (safety) study given that we achieved a successful result at the study's primary endpoint, and are disappointed in their decision to return the rights to ATI-7505 to us," said Aryx Chief Executive and Chairman Dr. Paul Goddard in a statement late Wednesday.

He said P&G based the decision on its view of certain commercial and technical criteria, and that the program no longer fits into its future plans.

Aryx is developing the drug ATI-7505 as a treatment for chronic constipation and functional dyspepsia. The company also said the drug passed a safety study that focused on possible heart-related problems. It hopes to move the drug candidate into late-stage development after finding a new partner.

Jefferies & Co. analyst Adam Walsh reaffirmed a "Buy" rating on the company and new price target at $9, down from a prior target of $17. He said that P&G could have partly based their decision to pull out of the partnership on a sub-analysis showing that female subjects were at higher risk of heart-related issues in the safety study. The company and its consultants, though, have attributed those results to study issues rather than a drug effect.

Meanwhile Oppenheimer & Co. analyst Bret Holley reaffirmed a "Outperform" rating on the stock, looking toward development of the blood clot drug ATI-5923 as the key value driver.

Shares of Cincinnati-based P&G rose 98 cents to $63.67.