Wyeth, Progenics bowel drug fails in study

NEW YORK (Reuters) - Wyeth (WYE.N) and Progenics Pharmaceuticals Inc (PGNX.O) said on Wednesday an intravenous form of their experimental bowel drug methylnaltrexone failed in a late-stage trial to improve gastrointestinal function following surgery.

Progenics, which considers methylnaltrexone its lead product, fell 67 percent in late morning trading. Wyeth, a far bigger company with many products already on the market, slipped 1.2 percent.

The partners said the formulation of their drug proved no better than a placebo in helping promote bowel movements among patients recovering from surgery to remove parts of their colon. The condition is formally known as postoperative ileus.

It was the first of two late-stage trials of the intravenous form of the drug among such patients. A second Phase 3 study is being led by Progenics.

"We expect the next postoperative ileus trial to fail as well," said Joel Sendek, an analyst at Lazard.

Morgan Stanley analyst Jami Rubin halved her sales forecast for the drug to $400 million by 2012.

But Goldman Sachs analyst James Kelly said he continues to believe the drug will be approved and garner sales of $1.1 billion by 2012. "We view this as a setback for the franchise, but we are not changing our estimates," he said, noting that the medicine is being tested in multiple formulations and populations.

Wyeth in the past year has suffered a series of setbacks with its roster of experimental drugs, although it won a boost last month when the U.S. Food and Drug Administration approved its Pristiq depression treatment.

Pristiq suffered a setback on Wednesday, however, when European regulators said Wyeth had withdrawn its marketing approval to market the compound as a treatment for hot flashes in menopausal women.

The European regulators said Wyeth pulled the application in order to conduct additional studies needed to answer their questions about whether the benefits of the medicine outweighed its risks.

Wyeth and Progenics in January said the FDA had delayed by three months its review of another formulation of methylnaltrexone, given by injection, that was tested among patients with constipation caused by use of opioid painkillers.

The delay, expected to push back the FDA's verdict on the injectable formulation until April 30, will allow the agency to examine effects of the intravenous formulation on a potentially dangerous electrical malfunction of the heart called QT prolongation. Wyeth and Progenics have said they have seen no evidence that the drug causes QT prolongation.

"Despite the results of this phase 3 trial for postoperative ileus, we remain confident in the methylnaltrexone development program," Robert Ruffolo, Wyeth research chief, said in a statement.

Wyeth and Progenics began their collaboration in late 2005. It gives Wyeth global rights to the medicine while giving Progenics an option to co-market the medicine in the lucrative U.S. market.

The companies are also testing oral forms of the drug and expect results from two mid-stage studies later this year.

Progenics fell $9 to $4.55 in heavy trading on the Nasdaq while Wyeth shares were 50 cents lower at $41.15 on the New York Stock Exchange.

(Reporting by Lewis Krauskopf, Toni Clarke and Ransdell Pierson; editing by John Wallace and Maureen Bavdek)