LONDON (Reuters) - British drugmaker Shire, whose shares have stormed ahead this year, disappointed investors on Friday with clinical trial results of a new dry eye drug that left the product's future unclear.
Lifitegrast did reduce patient-reported symptoms of eye dryness in a late-stage trial - the first drug to do so in a Phase III setting - but it missed a second target that measured signs of the disease based on corneal staining.
Shares Britain's third biggest drugmaker fell 2.2 percent by 0820 GMT on the news.
The findings from the latest trial contrast with those of an earlier Phase III one that found an improvement in disease signs, but not in symptoms.
Lifitegrast - a potential competitor for Allergan's Restasis, which is expected to have sales of around $900 million this year - is viewed as a key new product for Shire as it seeks to diversify its product line-up.
Shire Chief Executive Flemming Ornskov said the company would now examine the totality of the data across the clinical trials and discuss the future of lifitegrast with regulatory authorities, such as the U.S. Food and Drug Administration (FDA).
Analysts, however, were skeptical about the drug's future.
"Given these equivocal results and FDA's typical need for two supportive trials, we see an uncertain approval path," Jefferies analysts said in a note.
"Our modest $400 million peak (sales forecast) at 50 percent probability already fairly reflects this, but we see risk to others' more optimistic estimates."
Shire obtained lifitegrast after buying U.S. biotech firm SARcode Bioscience for $160 million upfront in March - plus undisclosed payments upon achievement of certain drug development and commercial milestones - marking a sizeable bet on the ophthalmology space by the group.
Shire has been hoping to launch lifitegrast in the United States as early as 2016.
Editing by Jane Merriman. Editing by Jane Merriman