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Biogen, Genentech's Rituxan Fails New Study

The drug Rituxan failed to benefit patients with lupus, according to negative results from a late-stage study announced Tuesday by the drug's partners, Genentech (DNA) and Biogen Idec (BIIB - Get Report).

This is the second clinical setback for Rituxan in the last two weeks. On April 15, the companies announced that a late-stage study in primary progressive multiple sclerosis also failed.

In this most recent study, patients with systemic lupus erythematosus (SLE), commonly called lupus, failed to respond any better to Rituxan vs. placebo after one year of treatment, the companies said. None of the study's six secondary endpoints were successful, either.

A separate phase III study of Rituxan in patients with lupus nephritis, a different form of the disease, is ongoing.

Lupus has proven to be a stubborn disease to overcome, leaving in its wake a long list of clinical trial failures. With that said, most analysts did not include Rituxan-lupus revenue in their financial models for either Genentech or Biogen Idec.

However, lupus and multiple sclerosis were seen as long-term growth opportunities for Rituxan, so the recent study failures take a bite out of that prospect.

Genentech and Biogen Idec reported 2007 Rituxan sales of $2.29 billion in the U.S., primarily as a treatment for the blood cancer non-Hodgkin's lymphoma. The drug is also approved to treat rheumatoid arthritis.

Genentech shares were down 5.8% at $68.93 in early trading Tuesday. Biogen Idec was trading down 5% at $61.43.

Know What You Own: Genentech has a deep cancer drug pipeline, with about 15 experimental drugs in phase I, II or III trials. Among the biotech company's cancer drug partners are Curis (CRIS - Get Report), Immunogen (IMGN - Get Report), Abbott Labs (ABT - Get Report), Seattle Genetics (SGEN) and Exelixis (EXEL - Get Report).

Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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