UPDATE 2-US FDA rejects Merck/Ariad sarcoma drug

Tue Jun 5, 2012 5:21pm EDT

* Panel voted 13-1 against Taltorvic in March

* Drug meant to keep sarcoma from getting worse

* Ariad shares down 2.4 pct in aftermarket

WASHINGTON, June 5 (Reuters) - U.S. drugs regulators rejected an experimental sarcoma medicine from Merck and Ariad Pharmaceuticals on Tuesday, asking for more clinical trials, Merck said.

The Food and Drug Administration issued a so-called "complete response letter" for the injectable therapy, known generically as ridaforolimus, after an advisory panel recommended against approval earlier this year.

The drug, which would have been sold as Taltorvic, is meant as a maintenance treatment for soft-tissue and bone sarcoma - or tumors arising from the connective tissue - for people who have already had at least four successful rounds of chemotherapy.

Soft-tissue sarcoma is a rare but aggressive form of cancer that afflicted about 11,000 Americans last year and killed about 4,000 of them, according to the National Cancer Institute.

An advisory panel of outside experts to the FDA recommended rejecting the medicine in March by a vote of 13 to 1 after data linked the drug with serious side effects like hospitalization or death, but showed it produced only small improvements in the amount of time before cancer worsened.

Merck, which licensed all development and marketing rights to the drug from Ariad, said it would work with the FDA to figure out next steps.

"Merck remains confident in the potential of ridaforolimus," Dr. Eric Rubin, the company's vice president for clinical research oncology, said in a statement.

Merck said it is still working on getting approval in Europe, and is testing the drug in other cancers, including lung, breast, endometrial and ovarian cancer.

Shares of Merck briefly slipped 0.6 percent to $37.27 in after-market trading before recovering, while shares of Ariad, a smaller company, fell 2.4 percent to $15.81.

Although Ariad's shares also fell after the panel vote in March, some analysts said the medicine is of relatively minor importance for the small biotech, which has two more major drugs in the pipeline and would only get royalties from an approval of Taltorvic.

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