Shares in Exelixis closed down nearly 7% yesterday reflecting investor disappointment on news that GlaxoSmithKline has decided not to exercise its option to license XL784 for further development.

The move came as no real surprise however, as in a recent Phase II clinical trial in patients with diabetic nephropathy the drug failed to meet its primary goal, although there were “encouraging data” from the study, Exelixis said. The compound was well tolerated, patients appeared to show a “substantial benefit” from XL784, although this difference did not reach statistical significance, the group claimed.

Further explaining GSK’s possible rationale behind its decision, Exelixis said it believes “the exciting data being generated by other compounds to which GSK has an option…made it unlikely that GSK would use one of its one or two remaining options to choose XL784”.

Under the terms of the companies’ alliance sealed in 2002 to discover, develop and commercialise therapies in the areas of vascular biology, inflammatory disease and oncology, Exelixis can now either develop the drug by itself or in collaboration with other parties, but will have to pay GSK a 3% royalty on sales of any products that make it to market.

GSK/Ranbaxy settle Imitrex wrangle
Meanwhile, India’s Ranbaxy Laboratories has come to an arrangement with GSK that allows it to sell a copycat version of the drug giant’s migraine drug Imitrex (sumatriptan) in the US from December this year.

Specific details of the deal were not revealed, but Ranbaxy said it will market 25mg, 50mg and 100mg tablet versions of the brand, which currently pulls in sales of around $985 million a year, according to the firm.