The Hindu Business Line : Trial of prostate drug stopped — Schwarz move may impact Ranbaxy deal

RANBAXY Laboratories Ltd's out-licensing research deal has hit a roadblock after Schwarz Pharma AG of Germany decided to discontinue the clinical Phase II trials of the molecule RBx 2258 - Pamirosin (SPM969) for the treatment of benign prostate hyperplasia (BPH) due to unclear pre-clinical findings.

Schwarz Pharma, in a statement, said that at present the pre-clinical findings need further evaluation. "Nevertheless, as a precautionary measure Schwarz Pharma has decided to put the clinical development programme on hold until final resolution," it said.

Ranbaxy, in a notice to the BSE, said that it has been informed by Schwarz Pharma that the Phase II clinical trials have been discontinued. The Delhi-based company had in June 2002, signed a licensing deal with the German company for its new chemical entity.

As per the agreement, Schwarz Pharma obtained exclusive rights to develop, market and distribute the product in the US, Japan and Europe, while Ranbaxy retained rights to all other markets. Ranbaxy had received an upfront payment of $6 million. The agreement also provided for the company to manufacture and supply finished formulations of the product to Schwarz Pharma.

Early this year, Ranbaxy received $4 million milestone payment from Schwarz Pharma towards further development progress of the molecule. The latter had then announced that it had completed Phase I clinical trials of the molecule in Europe and was now moving into Phase II trials in Europe and South Africa. In India, too, Phase II clinical trials of the molecule were under way.

According to analysts tracking the company, Schwarz' decision to discontinue Phase II trials would impact Ranbaxy's revenues. "The company has been getting milestone payments and this could be hit." It has also been hoping to generate revenues from marketing the product in some markets, this too could be hurt, said analysts.

"Added to this would be the loss of investment made in research and development and the negative impact it could have on the other products in the pipeline," they said. The molecule is under patent protection until 2018. The aim was to develop a once-a-day formulation with rapid relief of symptoms, an improved efficacy on lower urinary tract symptoms and a low incidence of side effects.

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