Shares in Merck KGaA have slipped this morning after the German firm suspended a mid-stage trial of its cancer vaccine Stimuvax after a patient suffered an “unexpected serious adverse reaction", ie encephalitis.

The Darmstadt-based company noted that one of 30 patients participating in a Phase II trial of the vaccine in patients with multiple myeloma developed encephalitis, or acute inflammation of the brain. The patient received the vaccine (licensed from the USA’s Oncothyreon) in combination with “an intensified schedule of low-dose cyclophosphamide, which is not used in the other Stimuvax studies”. Merck noted that it has now stopped recruitment and treatment of patients in all studies of the vaccine, including the Phase III non-small-cell lung cancer trials called START and INSPIRE, as well as the late-stage STRIDE study in patients with breast cancer.

The company says it will work closely with the regulatory authorities, particularly with the US Food and Drug Administration (which has placed a clinical hold on the Investigational New Drug application for Stimuvax) “to evaluate the implications of the adverse reaction on the clinical development programme” for the vaccine “and determine the most suitable course of action”. Merck added that the move is a precautionary measure as it finds out what caused the patient to contract encephalitis – indeed some patients have been taking Stimuvax for eight years without any serious problems.

Some analysts are fearing the worst, however. Andrew Baum at Morgan Stanley issued a research note saying that the suspension of the clinical programme for Stimuvax “constitutes another blow to the company's pipeline”, coming as it does on the back of regulatory rejections for Erbitux (cetuximab) as a treatment for advanced lung cancer. Merck also received a ‘refuse to file’ letter from the FDA for its oral multiple sclerosis drug cladribine in November last year, though it should be noted that regulators on this side of the Atlantic were satisfied with the submission and are reviewing the pill.

Richard Parkes at Piper Jaffray wrote that “we are surprised at such a swift decision to halt recruitment based on a single case of encephalitis, and it remains possible that other less severe signals of neurological adverse events may have contributed to the decision”.