Glenmark Pharmaceuticals and U.S. partner Forest Laboratories said a drug they were developing to treat smoker's cough failed in a mid-stage trial, knocking Glenmark shares down more than 17 percent on Wednesday.
The Indian firm had been banking heavily on the drug's success, and its breakdown means it will miss out on a potentially lucrative multi-billion dollar market, analysts said.
The drug was to treat chronic obstructive pulmonary disease (COPD), a persistent blockage of airways caused by emphysema or chronic bronchitis that affects an estimated 14 million Americans and is the fourth most common cause of death.
Glenmark and Forest said a Phase IIb study meant to determine the best appropriate dosing for the medicine, called oglemilast, did not show statistically significant results.
"Everybody had built in some kind of an upside because of commercialisation of this molecule," said Sarabjit Kour Nangra, analyst with Angel Broking.
"So, once there is no visibility or lesser visibility in terms of those coming through, the stock is taking a knock. The shares depend on how the R&D unfolds from here."
PIPELINE LOSES SHINE
Glenmark has two other drugs in mid-stage trials: one to treat Type II diabetes, and one for osteoarthritic pain, incontinence and neuropathic pain, according to the company's website.
It also has several other molecules, including those to treat rheumatoid arthritis, obesity and cardiovascular disorders that are in earlier-stage trials.
"Big multinationals may think twice about partnering with Glenmark because of this failure," said Verma, noting pharmaceutical giants were looking to keep their costs in check and would not want to risk spending on drug development only to see the compound fail in later-stage trials.
"We need to re-evaluate whether the trial was designed appropriately, what were the shortcomings ... we need to internally analyse all that," Glenmark Managing Director Glen Saldanha told a conference call.
Oglemilast did not show a statistically meaningful benefit, compared with a dummy drug, in a 12-week study that evaluated three doses of the medicine in patients with moderate to very severe forms of the ailment, Forest and Glenmark said.
