UPDATE 2-SciClone's hepatitis C drug fails main goal

(Adds comments from analysts, company CMO; updates with closing share price)

By Vidya L Nathan

BANGALORE, Nov 5 (Reuters) - SciClone Pharmaceuticals Inc (SCLN.O) said a late-stage trial of its experimental hepatitis C treatment, Zadaxin, failed to meet the main goal in a study group, sending its shares to a lifetime-low.

Zadaxin, being tested by SciClone's partenr Sigma-Tau S.p.A., is already approved for sale in some countries for chronic hepatitis C, but is yet to get clearance in the United States.

The company will analyze the data to decide whether to continue development of the drug for hepatitis C, SciClone's chief medical officer Israel Rios said by phone.

Susquehanna Financial Group analyst Jason Kolbert said, "For all intents and purposes, we believe that Zadaxin's future in hepatitis C is dead."

Analysts believe it is tough for companies to develop a treatment for hepatitis C -- a liver disease that can lead to liver cancer, cirrhosis and death -- as new drugs only add to the efficacy of the current standard of care.

Also, hepatitis C virus can remain in a person's body even after treatment and can stay undetectable without displaying symptoms.

"We expected the trial that SciClone's partner ran to have a very small chance of success. We are not surprised," Kolbert said.

The trial tested the efficacy of the drug, also known as thymalfasin, in combination with the standard of care for patients who did not respond to the standard treatment alone, the Foster City, California-based company said in a statement.

The study, which enrolled 552 patients, failed to meet the main goal of sustained virological response, or reaching levels at which the virus is undetectable in the body and appears to have been cleared from the system.

SciClone will focus on developing Zadaxin as a cancer treatment, Chief Medical Officer Rios said. Zadaxin is currently in mid-stage trials for the treatment of malignant melanoma.

SciClone has sufficient cash to continue development of the drug in hepatitis C if the company chooses to do so, BWS Financial analyst Hamed Khorsand said.

Among other companies that are developing drugs for the treatment of hepatitis C, analysts are optimistic about Vertex Pharmaceuticals Inc's (VRTX.O) telaprevir.

"I think telaprevir is going to be a home run. It will be the first drug in the market place. The profile of telapravir looks very good and that is going to be the drug to beat," Susquehanna Financial's Kolbert said.

SciClone's shares, which have lost more than half their value so far this year before Wednesday's losses, closed down 13 percent at 81 cents on Nasdaq. They touched a life-low of 63 cents earlier in the session. (Additional reporting by Esha Dey) (Editing by Amitha Rajan and Vinu Pilakkott))