* Otelixizumab misses primary endpoint in Phase III study
* Follows failure of similar drug from Eli Lilly last year
* Drug developed by GSK and Tolerx, licensed from BTG
* GSK and BTG shares little changed
(Adds further detail on drug, analyst comment, shares)
By Ben Hirschler
LONDON, March 11 An experimental GlaxoSmithKline
(GSK.L) drug has failed to help Type 1 diabetics in a late-stage
clinical trial, marking a setback for the group's fight against
autoimmune disease just two days after a notable win in lupus.
GSK has been developing the anti-CD3 antibody otelixizumab
as a treatment for people with newly diagnosed Type 1 diabetes,
although expectations for the medicine were modest following the
failure of a similar Eli Lilly (LLY.N) product in October.
Type 1 diabetes, previously known as juvenile diabetes, is a
disease in which the immune system attacks and destroys the
insulin-producing beta cells in the pancreas, leaving sufferers
reliant on regular insulin injections.
Only 5 percent of people with diabetes have the Type 1 form,
with most suffering from Type 2, which is associated with
lifestyle and obesity.
GSK secured rights to otelixizumab in 2007 through a deal
with unlisted U.S. biotech firm Tolerx, which in turn licensed
in the medicine from BTG BGC.L.
The drug's failure to preserve beta cell function in the
Phase III trial now leaves its future uncertain.
GSK said on Friday it would explore additional dosing
regimens in the light of the setback. New recruitment and dosing
in a second similar clinical study has been suspended pending
review of the results.
Earlier Phase II trials had used a higher dose of
otelixizumab, which is given intravenously, although this had
been associated with adverse side effects.
GSK is also looking at using the medicine in other
autoimmune conditions, including Graves eye disease and
rheumatoid arthritis, where it is in early-stage Phase I
Industry analysts had forecast a potential sales opportunity
for otelixizumab of around $500 million a year but uncertainty
about its effectiveness meant consensus forecasts for 2015 sales
were only $140 million, according to Thomson Reuters Pharma.
That makes it a relatively small product compared with GSK's
big new hope in autoimmune disorders, the lupus drug Benlysta,
which won U.S. regulatory approval on Wednesday. Benlysta,
discovered by GSK's partner Human Genome Sciences HGSI.O, is
expected to have global sales of around $3 billion in 2015.
GSK shares were 0.4 percent higher at 1,193 pence by 1530
GMT, outperforming a 0.7 percent decline in the European drugs
sector .SXDP, while BTG was up 1 percent at 218p.
Vadim Alexandre, an analyst at Daniel Stewart, said the
failure of otelixizumab was a "minor letdown" for BTG, resulting
in a 20p reduction to his target price to 263p.
(Additional reporting by Paul Sandle; Editing by Greg Mahlich)