Shares of Appili Therapeutics shed more than half their value on Friday after the Halifax drug discovery company released disappointing trial results for a drug candidate intended to treat COVID-19.

The company released a statement before the market opened on Friday saying the Phase 3 clinical trial evaluating Favipiravir as a treatment for mild-to-moderate COVID-19 “did not achieve statistical significance”.

After the news was released, Appili shares on the Toronto Stock Exchange plunged as low as 11 cents. They closed Friday at 26 cents, a drop of 53 percent from the previous day’s close. The company now has a market capitalization of $18.2 million.

“While we are disappointed by the topline results of the PRESECO trial, we remain steadfast in our belief that safe and effective oral antivirals are urgently needed for patients who are still struggling to overcome COVID-19,” said Appili CEO Armand Balboni in a statement. “Appili remains committed to addressing the challenges posed by infectious diseases and we will continue developing our pipeline to improve patient lives around the world.”

Favipiravir, which was to be marketed as Avigan/Reeqonus, was being evaluated under a PRESECO (PREventing SEvere COVID-19) clinical trial to determine if it could be used as an oral antiviral drug for COVID-19.

The drug had been approved for use in treating influenza pandemics by the Japanese government in 2014. Appili and FUJIFILM are part of a four-member consortium conducting the clinical trials to determine the medication’s efficacy for patients infected with the coronavirus.

The statement said the company is continuing to analyze the trial data. The clinical trial enrolled 1,231 patients with mild-to-moderate COVID-19 from 38 study sites across the United States, Mexico, and Brazil.

Appili specializes in bringing to market drugs that prevent infectious diseases and is working on several drug candidates. In 2020, it raised a total of $27 million in two private placements on the TSX Venture exchange. It later moved to the main board of the Toronto Stock Exchange.

Last month, the company announced it had raised a further $7 million in a private placement of shares.

Later Friday, Appili revealed its most recent financial statements, reporting a net loss of $18.5 million for the six months ending Sept. 30, compared with a net loss of $5.1 million in the same period a year earlier.

The company also said CFO Kimberly Stephens is leaving Applil for personal reasons and will be replaced by Kenneth G. Howling, who has over 25 years of experience in senior financial positions with several healthcare and pharmaceutical companies. 

“Although the top-line results of our Phase 3 PRESECO trial were not what we had hoped for, I am incredibly proud of all that our team accomplished this quarter which continues to demonstrate Appili’s ability to rapidly execute and achieve key development milestones,” said Balboni.