Roche, Biogen suspends arthritis drug after deaths

Roche and Biogen stopped using the experimental drug for the two diseases after a safety monitoring board said it had seen serious infections in studies involving the drug and that some were fatal, marking the latest setback for Roche's pipeline.

We now need to look at the data to gain an increased understanding of the causes of the infections, a Roche spokesman said, adding that the majority of opportunistic infections were reported in Asia.

Opportunistic infections are infections that do not normally occur in a healthy person.

Ocrelizumab, developed by Roche's Genentech unit and Biogen, is similar to Rituxan, which is already approved to treat cancer and rheumatoid arthritis.

Despite the setback, JPMorgan analyst Geoff Meacham said there was a silver lining for Biogen because it allowed the company to maintain a profit sharing percentage on Rituxan that otherwise would have been reduced had the follow-on drug progressed.

We see today's announcement as an incremental positive for Biogen as it could modestly improve the top- and bottom-line growth picture for the company, Meacham said in a research note.

Roche stock closed near flat, while Biogen shares were nearly 2 percent higher at 1645 GMT.

Roche said last year a late-stage trial of ocrelizumab showed it significantly reduced the signs and symptoms of rheumatoid arthritis, a painful joint disease, but that it was associated with a higher number of serious infections.

The drug was expected to succeed Rituxan when its patent expired, said Helvea analyst Karl-Heinz Koch. Rituxan records sales of around 900 million Swiss francs ($841.9 million) in rheumatoid arthritis, Koch said.

Rheumatoid arthritis is an autoimmune disease characterized by inflammation that leads to stiff, swollen and painful joints It affects some 20 million people, according to the National Rheumatoid Arthritis Society.

Ocrelizumab is still being evaluated for relapsing remitting multiple sclerosis and a Phase II study is on-going, Roche said.

But Helvea's Koch said the safety issues of the drug meant it was unlikely it would continue its clinical path and that he no longer expected peak sales of 800 million francs.

Roche, the world's largest maker of cancer drugs, suffered a setback last month when its cancer drug Avastin failed in a late-stage stomach cancer trial.

(Additional reporting by Lewis Krauskopf in New York; editing by Jon Loades-Carter and Karen Foster)

($1=1.069 Swiss Franc)