Sona Nanotech shares fell 68 percent on Friday after the Halifax life sciences company announced it had ended the clinical trials of its saliva-based rapid test for COVID-19 due to disappointing results.

The company had been conducting trials at Humber River Hospital in Toronto to determine the efficacy of its rapid antigen saliva test for COVID-19. Early Friday, Sona said preliminary results had produced “inadequate test sensitivity” and it was discontinuing the trials.

In an interview Sunday, CEO David Regan said the company will now take stock, examine data from the trials, and then move forward. The path forward will involve applying its nanotechnology on rapid tests for other afflictions, possibly even trying again to develop a rapid test for COVID-19, said Regan. The company will also continue to pursue its original mission of using toxic-free gold nanoparticles to attack cancerous tumors.

“Obviously, no one is more disappointed with the outcome of the trials than the board and the management of the company,” said Regan. “But it shouldn’t negate the tremendous work done by the team, or the fact that there were some great successes along the way.”

Listed on the Canadian Securities Exchange, Sona Nanotech last year gained attention when it began working on a test that could swab someone’s saliva as a rapid test for COVID-19. Regan said it was always going to be a “moonshot” because no company has yet received approval from the Food and Drug Administration in the U.S. for a saliva-based COVID test.

On Friday, the company released a statement saying that it had discontinued the trials because its test kits could not consistently reveal the existence of the virus, and it was getting harder and harder to find volunteers as pandemic cases decline.

"Unfortunately, as is often the case with prototypes, the early laboratory results did not translate well into the clinical environment,” the principal investigator, David Jacobs of Humber River Hospital, said in a statement. “While there are many possible reasons for this discrepancy, the favored hypotheses are that either there is insufficient viral concentration in saliva, or there is an interfering substance in the saliva."

In the wake of the announcement, Sona Nanotech shares fell 69 cents to 33 cents. The company’s market capitalization (the total value of all its shares) currently stands at $20.9 million.

The shares had soared last year as COVID-19 took hold, peaking last summer when the market cap hit $800 million. Their collapse in the second half led to a class action lawsuit from disgruntled shareholders. Regan declined to comment on the suit Sunday, except to say the company still intends to fight it vigorously.

What Regan did say is that biotech companies as a rule aim to commercialize “low-hanging fruit” to generate early revenue as they push on with large medical research projects. Sona couldn’t do that because of the pandemic outbreak, said Regan, adding the company felt a moral obligation to try to find a quick and affordable test that would help battle the virus.

Though the recent trials have ended unsuccessfully, Regan said the team of 10 to 12 people has not lost sight of the greatest potential opportunity for its technology. When SONA began seven years ago, its mission was to use new technology to produce gold nanorods, which could be used to kill cancerous tumors. Though gold nanorods have been shown to shrink tumors (a new paper last week re-affirmed this), conventional methods of producing these nanorods also create toxins that can harm human health. The Sona process generates no toxins and therefore could conceivably be used in treating cancer.

Regan said this remains the long-term mission of the company and offers the greatest economic and medical potential.

Because it developed a COVID test and experienced a boost in its share price, Sona was able to raise capital. It sold $2.26 million in stock last year, and Regan said it has raised “a couple of million” dollars by selling shares through an At The Market facility announced in April. And the team is more seasoned after recent events.

“We’re collectively disappointed (the clinical trial failed) but we also recognize, not only that there have been lessons learned, but also that we’ve gained tremendous advances in skills and capability.”