Merck, Partner Pull Plug on Sleep Drug

The drugmakers say the insomnia drug gaboxadol does not warrant further development.
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Merck (MRK) - Get Report has stopped working on an insomnia drug that the company had forecast could be an important product for the future.

Merck and the Danish drugmaker

H. Lundbeck

announced Wednesday that they have halted work on gaboxadol because "data from recently completed clinical studies suggest that the overall clinical profile for gaboxadol in insomnia does not support further development."

The companies, which have collaborated for three years, pulled the plug while gaboxadol was in the third and final stage of clinical trials. They said they won't seek regulatory approval in any country and didn't explain why the drug was unacceptable.

"The termination of our joint insomnia development program with Lundbeck is clearly disappointing," said Dr. Peter Kim, president of Merck Research Laboratories. Merck will continue to work on neuroscience and sleep disorders compounds, which represent one of nine "priority disease areas" for research, he added.

Merck's shares was off 24 cents in early trading Wednesday, slipping to $43.41.

Developed by Lundbeck, gaboxadol was touted by the companies as the first in a new class of compounds -- whose acronym is SEGA -- which act differently than existing sleep medications.

Early clinical trials showed the most common side effects were nausea and dizziness, as well as headache, vomiting and a rapid heartbeat referred to as tachycardia. Last June, the companies reported that "there were no serious adverse events" in Phase II clinical trials and that no patients withdrew from the studies due to side effects.

As recently as at a December meeting with analysts, Merck listed the insomnia drug as a potential contributor to future sales. But in October, Merck said it was delaying its expected filing date with the Food and Drug Administration to mid-2007 from the first quarter of 2007 due to "slower-than-expected enrollment" in clinical trials.

The demise of gaboxadol means there will be one less competitor for brand-name sleep drugs such as Ambien CR from

Sanofi-Aventis

(SNY) - Get Report

and Lunesta from

Sepracor

(SEPR)

. Ambien CR is a controlled-release version of Ambien, which loses U.S. patent protection next month.