Paradigm Biopharmaceuticals (ASX:PAR) said the interim efficacy result for its phase 3 trial of injectable pentosan polysulfate sodium for the treatment of knee osteoarthritis did not reach the threshold required for the study to proceed, according to a Wednesday filing with the Australian bourse.

Operational challenges resulted in a "significant amount of missing data" that impacted the interim analysis, which was conducted after about 50% of participants reached the day 112 primary efficacy endpoint, the company said.

Paradigm is reviewing the available data to better understand the extent of the impact. It expects to disclose the financial and funding implications of the outcome by Sept. 28.

The company said it is assessing the implications for its financial position and future operations, including a review of potential trial wind-down costs. It added that "material uncertainty" remains over the consequences of the trial outcome and the company's path forward.

Paradigm shares will remain suspended from trading until the release of its disclosure on the outcome's impact.