Shares of Kindred Biosciences, Inc. (KIN) plunged 28.2% as a pivotal field study on its pipeline candidate CereKin (interleukin-1 inhibitor) failed to meet the primary endpoint. Although the company recovered a nominal 0.2% in the subsequent trading session, shares are still down 28% since the announcement.

Kindred Biosciences announced top-line data from a pivotal study (KB010) evaluating CereKin for the treatment of pain and inflammation in dogs suffering from osteoarthritis.

The randomized, double-blind, placebo-controlled study evaluated the safety and efficacy of two doses of CereKin. The study missed the primary endpoint of a statistically significant improvement in the response rate compared to placebo.

Kindred Biosciences intends to submit detailed data at a forthcoming scientific meeting.

Kindred Biosciences also provided an update on its pipeline candidates. The company continues to enroll patients in pivotal studies being conducted on AtoKin (treatment of atopic dermatitis in dogs) and SentiKin (treatment of post-operative pain in dogs).

Positive results from these studies would allow Kindred Biosciences to file New Animal Drug Applications for marketing approval of AtoKin and SentiKin in the U.S. in 2014. This could be followed by a potential product launch as early as the end of 2015.

Kindred Biosciences has completed a pharmacokinetic (:PK) study on extended-release SentiKin for post-operative pain in cats. A PK study of a drug for the stimulation of appetite in cats has commenced with a study for fever in horses expected to start this quarter.

The company also announced significant progress in its biologics programs, which include erythropoietin for cats with anemia and immune checkpoint inhibitors for dogs with cancer.

We are disappointed with the pipeline setback pertaining to CereKin at Kindred Biosciences. We expect investor focus to remain on the company’s progress with its pipeline.

Kindred Biosciences is a Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the biotech sector include Amgen Inc. (AMGN), Cambrex Corp. (CBM) and China Biologic Products, Inc. (CBPO). All three hold a Zacks Rank #1 (Strong Buy).

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