An experimental drug to combat amyotrophic lateral sclerosis, commonly called Lou Gehrig's disease in the United States, failed to work in an important trial and Biogen Idec said it would stop development of the treatment.
The drug, dexpramipexole, had shown promise and seemed to work against ALS in a mid-stage clinical trial in 2011, creating hope for patients suffering from the progressive, fatal disease, who currently have few options.
Biogen shares, which rose 25 percent in 2012, fell 2 percent.
"There was a lot of hope behind this particular treatment," said Carrie Martin Munk, a spokeswoman for The ALS Association.
"Other companies are presently developing treatments to help fight ALS, so while we are saddened by today's news and had obviously hoped for better results, we're going to keep working with companies to advance treatments and bring them to patients as soon as possible," Munk said.
ALS is a disease of nerve cells in the brain and spinal cord that affects about 30,000 Americans, according to The ALS Association. About 5,600 Americans each year are diagnosed with the disease, long associated with legendary New York Yankees baseball player Lou Gehrig, whose career was cut short by ALS. He died of the disease in 1941.
There is currently only one drug available to help people with ALS - Rilutek, or riluzole, made by Sanofi. It has been shown to prolong the life of people with ALS, who have a life expectancy of two to five years after diagnosis.
The news was an uncommon blow for a company that has had a steady drum beat of positive news over the past few years.
Mark Schoenebaum, an analyst at ISI Group, said the failed study had been viewed as a high risk trial. Schoenebaum said Wall Street was estimating sales of about $350 million for the drug in 2016, but that he had figured on only about $100 million in sales by then.
In the 943-patient late-stage trial, dexpramipexole failed to slow decline of physical or respiratory function or improve survival, the company said. There was also no evidence of efficacy in subgroups of patients who were analyzed, leaving no path forward for the drug.
"We share the disappointment of members of the ALS community, who had hoped that dexpramipexole would offer a meaningful new treatment option," Biogen Executive Vice President of Research and Development Douglas Williams said in a statement.
Biogen said it is looking at other potential ALS treatments in preclinical programs and is working in collaboration with academic researchers at a variety of institutions.
"We're in it for the long run and we are committed to finding a treatment for ALS," Biogen spokeswoman Ligia Del Bianco said.
Biogen shares were down $3.10, or 2 percent, at $146.93 in late morning trading on Nasdaq.
(Additional reporting by Caroline Humer in New York and Esha Dey in Bangalore; Editing by Roshni Menon, Nick Zieminski, John Wallace and Marguerita Choy)