Idenix Pharmaceuticals Inc. said on Friday it has written off its experimental hepatitis C drug after U.S. regulators ruled that the risks associated with the drug outweigh the benefits.
Shares of the Cambridge, Massachusetts-based biotechnology company plunged more than 32 percent after the U.S. Food and Drug Administration placed further development of the drug in the United States on hold.
While Idenix said it will discuss the issue with its partner, Swiss drugmaker Novartis AG, the company said it does not believe the drug can be rescued.
I believe this drug will have no future in further clinical development, Jean-Pierre Sommadossi, the company's chief executive officer, said on a conference call with analysts.
The demise of the drug, valopicitabine, is testament to the difficulty that drug companies are having in developing new treatments for hepatitis C, a blood-borne virus that destroys the liver and affects roughly 4 million people in the United States.
Shares of Vertex Pharmaceuticals Inc., whose experimental hepatitis C drug telaprevir is considered one of the most promising, fell 1 percent to $29.05 on Nasdaq.
Idenix said the FDA decided, after reviewing data from the company's clinical trials, that the benefit of the drug was not enough to offset the risk of gastrointestinal side effects such as nausea and vomiting.
Idenix only has one product on the market -- a treatment for hepatitis B called Tyzeka -- that was approved last October. Hepatitis B, which also attacks the liver, affects about 1.2 million people in the U.S.
Idenix, which is majority-owned by Novartis, said it had about $160 million in cash, cash equivalents and marketable securities on hand at the end of June.
Over the next few weeks, we will be taking a critical look at our expenses with the goal of investing in programs that we believe will create shareholder value, said Ronald Renaud, the Idenix chief financial officer.
Shares of Idenix fell $1.87 to $3.92 on Nasdaq. Shares of Novartis fell nearly 1 percent to 66.25 Swiss francs.
(Additional reporting by Lewis Krauskopf, editing by Mark Porter and Jeffrey Benkoe)