NEW YORK – Pfizer Inc. (PFE) said Friday it is dropping development of two drugs, one to treat HIV and one to treat smoker's lung and asthma, after they failed to show any substantial benefit to patients.
The world's largest drug company said it is dropping the HIV treatment, capravirine, based on the results of two mid-stage trials which did not demonstrate significant advantages over standard therapies.
The company is also dropping development of Daxas (search) for the treatment of chronic obstructive pulmonary disease — often caused by smoking and sometimes called smoker's lung (search) — and asthma. The drug also failed to provide the hoped-for benefit.
The failures come as Pfizer seeks to bring new drugs to the market to replace existing drugs that are losing patent protection and to help offset lost sales from the withdrawal of arthritis drug Bextra amid safety concerns.
Analysts said they were not surprised by the latest news, but the company's shares still fell 2 percent in mid-morning trading.
"These were both products where there were signals they might have problems," said Albert Rauch, an analyst at A.G. Edwards & Sons Inc.
The company said it is returning the rights to Daxas, which was in the final stages of development, to Altana (search) of Germany, whose shares plunged nearly 13 percent on the news.
Pfizer will return rights to capravirine to Japan's Shionogi & Co.
"We always expect some of our development programs to fail, so this not unexpected, said Stephen Lederer, a Pfizer spokesman. "This shows the scale of Pfizer's pipeline and it shows that this is a risky business."
Barbara Ryan, an analyst at Deutsche Bank, said she had expected the smoker's lung drug, if approved, to generate sales of about $500 million and the HIV drug to generate peak sales of about $200 million.
"This doesn't change anything for Pfizer," she said. "We hadn't held out much hope for Daxas and the revenue would have been split with another company anyway."
Pfizer has several other products in late stage development that the company could submit by the end of this year for marketing approval, analysts said.
These include Varenicline, a smoking cessation drug, Maraviroc, a new HIV drug, and Sutent, a cancer drug.
The company also recently agreed to pay $1.9 billion to acquire Vicuron Pharmaceuticals Inc., a biotechnology company with two promising anti-infectives that could shortly receive regulatory approval.
More acquisitions are probably on the cards, analysts say.
"We fully expect them to be very aggressive in acquiring products," said Rauch.
Pfizer's shares fell 57 cents, or 2.1 percent, to $27.02 on the New York Stock Exchange (search).