Vanlev News Batters Bristol-Myers

Bristol-Myers Squibb (BMY Quote) shares are trading sharply lower after the drug giant said its experimental heart drug Vanlev is not superior to current treatments for patients suffering from congestive heart failure.

Trading was halted in Bristol-Myers Wednesday morning as results of the Vanlev clinical trial were released. Trading resumed just before 12 p.m. EST, with shares down $7.55, or 15%, to $41.10, a four-year low. It closed at $41.08.

Vanlev is the most important drug in Bristol-Myers' pipeline. The company is in desperate need for a new blockbuster drug to make up for several other products that have been ravaged by generic competition. Bristol-Myers' has also been hurt by its troubled partnership with ImClone Systems (IMCL Quote) over cancer drug Erbitux.

But it appears unlikely that Vanlev will meet its lofty expectations after the bad news released Wednesday. Results from a large clinical trial in congestive heart failure patients showed that Vanlev was equivalent to a widely prescribed Merck(MRK Quote) drug, Vasotec. In order to be deemed a success, however, Vanlev needed to show that it was superior.

The test results were released at the annual meeting of the American College of Cardiology, being held in Atlanta.

Vanlev is also being developed to combat hypertension, but the drug's side effects are worse than existing drugs, which will discourage many doctors from using it.

Vanlev causes a swelling in the face and throat, called angiodema, that can be severe and life threatening in a very small percentage of patients. That's a problem because most hypertension patients are relatively healthy, and would not choose to take a drug with severe side effects. Bristol had submitted Vanlev last year to the Food and Drug Administration, then pulled the application to do more studies on the side effects.