Eli Lilly and Co said it will stop one of three late-stage trials of its rheumatoid arthritis drug tabalumab after an analysis showed that the trial was unlikely to be successful.
The trial was testing the drug in patients with moderate-to-severe rheumatoid arthritis who were not responding adequately to methotrexate therapy, which is a standard rheumatoid arthritis treatment.
The decision was not based on safety concerns, and patients currently enrolled in other tabalumab rheumatoid arthritis studies will continue treatment, Lilly said.
However, the company said it would suspend enrolment of new patients in the rheumatoid arthritis program until additional analysis from other ongoing rheumatoid arthritis studies is completed in early 2013.
"The results of this study were unexpected given the data generated in earlier Phase II clinical studies of tabalumab," Lilly's vice president of autoimmune product development, Eiry Roberts, said.
The discontinuation of the study is expected to result in an after-tax charge of about 2 cents per share in the fourth quarter.
Late-stage trials testing the drug in lupus, an autoimmune disorder, will continue to enroll new patients, the company said.
ISI Group analyst Mark Schoenebaum said the drug's sales were estimated at around $250 million in 2018, noting that rheumatoid arthritis was a competitive market and expectations for the lupus market were low as well.
"If we wipe out all (tabalumab) sales from our model, our discounted cash flow drops about 50 cents, so the impact is small," Schoenebaum added.
The company's shares, which have gained more than 25 percent in the past twelve months, were down 1 percent at $48.50 in afternoon trade on the New York Stock Exchange.
Lilly is working on another rheumatoid arthritis drug called baricitinib, which is being far more closely watched by the industry given its potential. The drug is also getting tested for psoriasis and diabetic nephropathy.
Baricitinib, currently in late-stage development, belongs to a new class of oral medicines called Jak inhibitors that aim to compete with the injected rheumatoid arthritis drugs that currently dominate the market with billions in sales.
Rheumatoid arthritis is an autoimmune disorder that leads to inflammation of the joints and surrounding tissues. Jak inhibitors block enzymes believed to be involved in the inflammatory process.
Pfizer Inc was the first company to bring one of these new drugs to market with the U.S. approval of tofacitinib, which will be sold under the brand name Xeljanz. It was launched last month.
Another autoimmune disorder drug in Lilly's pipeline is ixekizumab — being tested for psoriasis and psoriatic arthritis.
(Reporting by Esha Dey in Bangalore; Editing by Joyjeet Das)