UPDATE 2-UCB receives EU setback for drug in diabetic pain

(Adds analyst comment, background on job cuts)

By Philip Blenkinsop

BRUSSELS, Sept 25 (Reuters) - Belgian drugmaker UCB (UCB.BR) withdrew its EU application to sell Vimpat, or lacosamide, as a treatment for diabetic neuropathic pain on Thursday after a negative view from the European Medicines Agency.

"UCB has taken this decision based on the EMEA's Committee for Medicinal Products for Human Use (CHMP) view that the magnitude of the clinical effect of lacosamide in diabetic neuropathic pain has not been convincingly established," UCB said in a statement.

"UCB would need to initiate an additional clinical trial to further substantiate the magnitude of effect of lacosamide in diabetic neuropathic pain," the company continued.

A UCB spokeswoman said the company intended to conduct this study and would likely seek approval for lacosamide, which has the trade name Vimpat, for diabetic neuropathic pain at a later date.

Vimpat had already received a "not approvable" letter in diabetic neuropathic pain from the U.S. Food and Drug Administration in July.

Deutsche Bank analysts said the European rebuff was not a surprise in the light of the FDA decision, athough the regulators' concerns were likely driven by issues over the drug's efficacy rather than its safety.

"It is possible that UCB may be able to eventually gain a label in this indication should it demonstrate convincing efficacy in a further clinical study," they wrote in a research note.

Vimpat is already approved in Europe as a treatment for epilepsy and UCB has launched it as an adjunctive treatment in adults in Germany, Britain and Austria.

Analysts expect the U.S. FDA to rule on approval of the drug to treat epilepsy by the end of the year.

UCB believes that Vimpat is a potential blockbuster -- meaning peak annual sales of at least $1 billion -- in epilepsy and a successor to its mainstay Keppra, which is set to face competition from generics from November.

Keppra's patent protection lasts until 2010 in Europe.

UCB is pinning its hopes for the future on new drugs like Vimpat, as well as Cimzia for Crohn's disease and Neupro for restless legs syndrome.

The company last month announced plans to cut 2,000 jobs or 17 percent of its workforce, as it wrestles with the fall-out from losing patent protection on older drugs, including Keppra and top-selling hayfever medicine Zyrtec. (Additional reporting by Ben Hirschler in London; editing by Jon Loades-Carter/Elaine Hardcastle)