(Corrects next-to-last paragraph to Zyprexa schizophrenia drug, instead of Plavix blood clot preventer)
* Lilly, BioMS say drug fails main, secondary trial goals
* Second trial failure this year ends hope for medicine
* Lilly shares little changed after hours (Adds details on failed trial, termination of studies)
By Ransdell Pierson
NEW YORK, July 27 (Reuters) - Eli Lilly and Co (LLY.N) and BioMS Medical Corp MS.TO said on Monday their experimental treatment for multiple sclerosis failed to delay progression of the disease in a late-stage trial and that they would discontinue all ongoing studies of the product.
The death knell for BioMS' main product comes six months after the drug, called dirucotide, failed to meet a main goal in a mid-stage study, sending the tiny company's shares down more than 50 percent.
In the earlier study, the drug failed to prevent symptoms of the potentially crippling neurologic condition from returning among patients with the relapsing-remitting type of the disease. Such patients have unpredictable relapses followed by months to years of remission.
The drugmakers, which have been collaborating since late 2008 on dirucotide, said the latest negative results were seen in a study of the drug that involved 612 patients with secondary progressive multiple sclerosis (SPMS). Such patients have initial relapsing-remitting MS, but then begin to have progressive neurologic decline between acute attacks without definite periods of remission.
Patients in the study were divided into groups that received either dirucotide or a placebo intravenously every six months for two years.
In addition to failing its primary goal of delaying the time it took for the disease to worsen in patients, the drug also failed secondary goals, the drugmakers said.
"We are obviously disappointed by this result and will be working closely with our clinical team to evaluate these data," BioMS Medical Chief Executive Kevin Giese said in a statement.
The deal between the two drugmakers gave Lilly worldwide rights to dirucotide and BioMS an upfront payment of $87 million. In addition, BioMS was given the right to potential milestone payments of up to $410 million and escalating royalties on sales if the drug was approved.
Indianapolis, Indiana-based Lilly, which badly needs new drugs as it girds for the looming patent expiration of its Zyprexa schizophrenia drug, has been responsible for research and development of the drug.
Shares of Lilly, a far bigger company than BioMS that sells an array of medicines, fell slightly after hours to $34.89 after closing up 1.36 percent at $35.15 on the New York Stock Exchange. (Reporting by Ransdell Pierson; Editing by Toni Reinhold)