Pfizer scraps cancer drug; Coley shares tumble

NEW YORK, June 20 (Reuters) - Pfizer Inc. said on Wednesday it has discontinued trials of an experimental lung cancer drug licensed from Coley Pharmaceutical Group COLY.O after an independent review committee deemed it ineffective, spurring a 60 percent decline in Coley shares .

"The (committee) concluded that the risk-benefit profile did not justify continuation of the trials," Pfizer (PFE.N) said in a press release.

The New York-based drugmaker, which is trying to become a major force in oncology, said the canceled trials include two late-stage and two mid-stage studies of the medicine, which it licensed from Coley in 2005.

The compound, called PF-3512676, was no more effective in combination with chemotherapy than chemotherapy alone, according to an analysis by the independent data safety monitoring committee.

It is Coley's only drug in late-stage trials, making it the company's most important drug.

Coley shares were down $5.06 to $3.43 in heavy afternoon trading on the Nasdaq. Pfizer was down 44 cents, or 1.6 percent, to $25.77 on the New York Stock Exchange, amid a 0.9 percent decline for the American Stock Exchange Pharmaceutical Index of large U.S. and European drugmakers.

Cowen and Co. had predicted the medicine, if approved, would generate annual sales of $100 million by 2012.

(Reporting by Ransdell Pierson)

((Editing by John Wallace; Reuters Messaging: ransdell.pierson.reuters.com@reuters.net; 646-223-6034; ransdell.pierson@reuters.com)) Keywords: PFIZER COLEY/

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