UPDATE 2-Clinical Data's depression drug meets main goal

* Says drug meets main goal in second late-stage trial

* To submit NDA by the end of 2009

* Shares jump 14 pct, but pare some gains (Adds analysts' comments, details, share movement)

By Anand Basu

BANGALORE, June 2 (Reuters) - Clinical Data Inc CLDA.O said its experimental drug to treat major depressive disorder (MDD), vilazodone, met the main goal in a second late-stage study.

However, the study failed to replicate a proprietary lead biomarker, or tests which predict response to treatment, that had been identified in the first late-stage trial as potentially associated with response to vilazodone, the company said.

Shares of the biotechnology company rose to a high of $15.94 but pared some gains and were up 4 percent at $14.55 Tuesday afternoon on Nasdaq.

"Obviously the fact that they were not able get the perceptively designed biomarker validated is a disappointment, but it sounds as though they have a decent drug in terms of efficacy," analyst Andrew Vaino of Roth Capital Partners said.

The study met its main goal of reducing the symptoms of depression compared with a dummy drug, the company said.

The drug was generally well-tolerated, and the efficacy and safety data were consistent with the findings from the previous late-stage trial, it added.

"In addition, study findings corroborate that effects of vilazodone on sexual function were comparable to placebo, an important finding since many antidepressants have been associated with causing or exacerbating sexual dysfunction," the company said in a statement.

Analyst Vaino, who has a "buy" rating on Clinical Data shares, said some digestive side effects associated with this drug were observed, but dropouts due to this issue was fairly low.

Clinical Data said one patient out of 240 patients randomized to the vilazodone group discontinued the trial due to diarrhea and three patients due to nausea.

"These gastric side effects tend to decrease as a function of time, and they are not that severe," Vaino said.

However, Biologic Investment Research analyst Kevin Mcnamara, who termed the late-stage study "bland," voiced concerns about the side effects of the drug.

"The side effect profile of this drug is pretty nasty. There is no need for a selective serotonin reuptake inhibitor (antidepressants) in the market with no differentiation and a worse side-effect profile," said Mcnamara, who has a "sell" rating on Clinical Data stock.

The company expects to submit a new drug application for vilazodone for the treatment of MDD to the U.S. Food and Drug Administration by the end of 2009.

For the alerts double-click [ID:nWNAB5479] . (Editing by Himani Sarkar and Deepak Kannan)