GlaxoSmithKline has decided to pull the plug on a mid-stage trial of the investigational osteoporosis drug ronacaleret, according to its development partner NPS Pharmaceuticals.

In a filing with the US Securities and Exchange Commission, NPS says that the drug failed to show benefit in a Phase II study of postmenopausal women with osteoporosis. As a result, clinical development on ronacalaret will be terminated, though the New Jersey-based firm noted that the $26.1 million it has received from GSK in license fees, research support, milestone payments and equity purchases will not have to be returned. It was also noted that the decision to end the trial was “not the result of any unexpected safety signal,''

The firms started collaborating in 1993 and NPS added in the filing that GSK “has not communicated to the company a decision with respect to their continuation of other R&D activities” under the agreement.

Shares in NPS sank some 15% on the news of GSK’s decision but analysts believe that the stock decline may be somewhat exaggerated. NPS’ pipeline looks reasonably health and while the shares plummeted in October last year after Gattex (teduglutide) failed a Phase III trial in short bowel syndrome, the drug, which is a glucagon-like peptide-2 analogue, demonstrated efficacy at the lower dose. NPS and partner Nycomed are conducting a second Phase III trial into Gattex, which is also being evaluated as a treatment for Crohn’s disease in a Phase II study.