FOSTER CITY, Calif. (
said late Monday that the experimental blood pressure drug darusentan failed a phase III study, prompting the company to discontinue its development.
The darusentan setback isn't likely to have much of an impact on Gilead's future earnings, although it's an expensive and disappointing reminder that the company's $2.5 billion acquisition of the biotech company
in 2006 -- the original developer of darusentan -- hasn't paid off.
Treatment with darusentan, a once-daily pill, failed to lower blood pressure compared with placebo in patients with resistant hypertension -- defined as high blood pressure that could not be controlled by other medicines.
The negative results from Monday's phase III study are a surprise given that darusentan was shown to
in a previous phase III study announced last April. But
to darusentan reported from the first phase III study, including swelling, heart attacks and heart failure, clouded the drug's future.
As a result, most analysts and investors did not include darusentan sales in their Gilead financial models, which mitigates Monday's setback.
"We are disappointed that darusentan did not achieve its primary endpoints in this study," said Norbert Bischofberger, Gilead's research and development chief, in a statement. "As a result, we think it would be challenging to define an expedient path forward. We would likely be required to initiate another Phase III study and would rather allocate our resources to other promising research and development opportunities in our pipeline."
Gilead acquired darusentan as part of the $2.5 billion purchase of Myogen in 2006, which was supposed to expand Gilead's reach into serious cardiovascular and lung disease and diversify away from its core operations as a provider of market-leading HIV drugs.
But three years later, the Myogen acquisition seems like an expensive failure. Darusentan's development has been shelved and Letairis, a drug for pulmonary arterial hypertension (PAH) also acquired from Myogen, has been a commercial disappointment.
Letairis was launched commercially during the summer of 2007, but sales in the first nine months of 2009 totaled $132 million, far below the expectations of investors first set when the drug was acquired. Gilead has acknowledged that selling Letairis, particularly against an entrenched, competing PAH drug marketed by Swiss firm
, has been more difficult than the company first envisioned.
Neither of Gilead's other recent corporate acquisitions designed to diversify away from the HIV field --
in 2006 and
in 2009 -- have managed to contribute meaningfully to the company's earnings to date.
The more Gilead invests in areas outside HIV, the more the company seems to become reliant on HIV for its future growth. The most important project in the company's research pipeline today is the so-called quad pill for HIV which combines four Gilead drugs into a single, once-daily treatment for HIV.
If the quad pill is successful, Gilead will become the first company to market a complete treatment for HIV on its own. Results from important mid-stage studies of the quad pil" are expected in early 2010.
Gilead shares closed Monday at $46.96. The stock is down 8% for the year. Only
, among the big-cap biotech stocks, has performed worse in 2009.
are up small amounts for the year, while
shares are down slightly.
-- Reported by Adam Feuerstein in Boston
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;
to send him an email.