La Jolla Pharmaceutical Stock Crashes After Drug Fails In Pivotal Clinical Trial

2/12/09Follow @xconomy

La Jolla Pharmaceutical said today that its lead drug candidate, Riquent, failed in a clinical trial of lupus of the kidneys. The news wiped out almost 90 percent of the San Diego-based company’s stock market value, driving shares down to 26 cents after the opening bell.

The company (NASDAQ: LJPC) issued a one-paragraph statement this morning that said an independent board of safety monitors, who took an early peek at results of the Aspen study while it was ongoing, found the company had no chance of reaching its goals of effectively treating lupus nephritis. La Jolla said it decided to halt the study. Once it has had a chance to look at the data, La Jolla will tell investors more about its “strategic options in the future.”

The failure of the drug is a devastating setback for La Jolla, but not really a shock in the field of lupus, a difficult-to-diagnose and difficult-to-treat autoimmune disease, in which the body’s immune system goes haywire and attacks healthy tissue. No new drugs have been developed for the disease for more than 40 years, although several biotechs, including industry leaders Genentech and Biogen Idec, have tried and failed to develop drugs that work better than standard immune-suppressants. An estimated 1.5 million to 2 million people in the United States have lupus, according to the Lupus Foundation of America.

La Jolla’s Aspen trial began in October 2004, and was designed to enroll 730 patients, according to a description on clinicaltrials.gov. It was meant to examine two different doses of the injectable drug, abetimus sodium, compared with a saline injection as a placebo. La Jolla received a $15 million upfront payment last month, when it signed a partnership with Novato, CA-based BioMarin Pharmaceuticals to co-develop and co-market the drug.

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