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Raptiva Fails Study; Drug Firms' Shares Fall

March 23, 2004|From Bloomberg News

Genentech Inc. and Xoma Ltd. said Raptiva, their drug for the skin disorder psoriasis, failed in a study to ease symptoms of a related form of arthritis. Shares of both companies fell, with Xoma down 13%.

There was no significant difference in joint pain between psoriatic arthritis patients taking Raptiva and those receiving a placebo, the two California companies said. The medicine did improve psoriasis symptoms.

The results probably shut off an avenue for future Raptiva sales growth. The medicine previously failed to work against rheumatoid arthritis, a different form of the painful, joint-destroying disease, and the chances that it would succeed in psoriatic arthritis had been considered low, said Dennis Harp, a Deutsche Bank Securities Inc. analyst in New York.

"Xoma management gave a heads-up that the results would be coming, and the implication was that Xoma believed the outcome would be positive," Harp said.

Shares of Genentech fell $2.71, or 2.6%, to $102.14 on the New York Stock Exchange, while Xoma fell 68 cents, or 13%, to $4.47 on Nasdaq. It was the biggest one-day drop in Xoma shares since May.

Genentech is based in South San Francisco and Xoma is based in Berkeley.

The results suggest that the underlying cause of psoriatic arthritis differs from psoriasis, a common disorder that causes patches of itchy, flaking skin, said Hal Barron, Genentech's chief medical officer.

About 900,000 U.S. patients have moderate to severe arthritis needing treatment, and about 100,000 of them have the psoriatic form of the disease, Harp said.

Had Raptiva proved effective, it still would have faced competition from Amgen Inc.'s Enbrel drug and other established treatments, he said.

"We never forecasted significant sales of Raptiva for psoriatic arthritis," Harp said. "We forecasted zero."

The study followed 107 patients for 24 weeks, and full results would be released at a scientific meeting, Genentech spokeswoman Tara Cooper said. The company hasn't decided whether to continue developing Raptiva for psoriatic arthritis.

Raptiva, Xoma's only marketed drug for psoriasis, won Food and Drug Administration approval for that use in October.

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