Vanda Pharmaceuticals Inc said it would stop developing its experimental drug for major depressive disorder after it failed to meet the main goal of improving symptoms in patients in a clinical trial, sending its shares down about 8 percent.
The company said patients treated with the drug tasimelteon and those on a placebo showed about a 40 percent reduction in symptoms, based on a standard scale that measures severity of depression.
The trial, named Magellan, enrolled 507 patients in 43 sites in the United States, and was comparing a 20mg dose of the drug with a placebo.
Major depressive disorder is one of the most common mental disorders in the United States and affects about 14.8 million American adults, according to the National Institute of Mental Health.
The company is also studying tasimelteon as a treatment for a rare sleep disorder, called "non-24-hour disorder" - a condition in which a person's body clock does not automatically set to the 24-hour day and affects a majority of blind people.
"Tasimelteon's application in the treatment of blind individuals with Non-24 remains our top priority as we pursue our planned NDA submission this year," Vanda CEO Mihael Polymeropoulos said in a statement.
Vanda said last week that tasimelteon proved effective in a second late-stage trial for non-24-hour disorder and that it planned to apply for a U.S. approval for the drug in mid-2013.
Vanda has an approved schizophrenia drug called Fanapt that is sold in partnership with Novartis in the United States. It also has an experimental drug for alcohol dependence, called VLY-686, that it licensed from Eli Lilly.
Vanda's stock was trading at $4.00 before the bell. It closed at $4.34 on Wednesday on the Nasdaq. It has gained 5 percent since the company reported data for non-24-hour disorder last week.
(Reporting by Esha Dey in Bangalore; Editing by Roshni Menon)