Bristol-Myers Squibb ( BMY), in a stunning disclosure Thursday, said it may have to cancel efforts to market its experimental diabetes drug Pargluva. Further tests required to meet the requirements of the Food and Drug Administration could take five years, the company said. "Bristol-Myers Squibb will continue discussions with the FDA and will consider a range of options including conducting additional studies or terminating further development," the company said. Additionally, Bristol-Myers said it will begin discussions with its marketing partner Merck ( MRK) to end their agreement. The announcement came about an hour after the markets had closed. The development is a major setback for Bristol-Myers, and to a lesser extent Merck, because both companies need new products to help offset eroding revenue caused by big products losing, or about to lose, patent protection. In after-hours trading, Bristol-Myers stock was off $1.27, or 5.9%, to $20.40 after having lost 4 cents during regular trading. The Pargluva setback will likely dominate the company's third-quarter earnings conference with analysts scheduled for Friday. Merck's shares fell 92 cents, or 3.4%, to $26 in extended trading. The stock dropped 27 cents in regular trading. Bristol-Myers and Merck announced on Oct. 18 that they had received
conditional approval from the FDA for Pargluva, known by its generic name muraglitazar. The companies didn't provide many details except to say that the FDA wanted additional information about ongoing clinical trials relating to side effects. At the time, analysts speculated that the FDA's request for data would delay Pargluva's launch by about 12 months to late 2006. But on Thursday, Bristol-Myers said the companies "have determined that to receive regulatory approval and to achieve commercial success, additional studies may be required because the ongoing trials were not designed to answer questions raised by the FDA." Those studies could take "approximately five years to complete."