Swiss biotechnology company Actelion saw its shares slide this morning after it reported that its main product, Tracleer (bosentan), was ineffective in treating the lung disease pulmonary fibrosis in two Phase III trials.

Analysts had expected that the company could double Tracleer's sales over the next few years if the drug proved effective as a treatment for pulmonary fibrosis in addition to its existing use in pulmonary hypertension. At present there are no effective treatments for the disease.

Tracleer generated sales of 455 million Swiss francs in the first nine months of the year, already ahead of the entire sales total for the product in 2004, and Actelion has said it hopes sales will reach nearly 1 billion francs in 2009. But the product is facing competition in the PAH sector from pharma heavyweight Pfizer, which has just won European approval for PAH drug Revatio (sildenafil), as well as a number of other smaller players such as United Therapeutics and Encysive Pharmaceuticals.

Tracleer failed to achieve its primary objective in the Phase III pulmonary fibrosis studies, which was to increase the number of patients who were able to complete a six-minute exercise test. However, Actelion saw some significant improvements with Tracleer on secondary measures, including combined incidence of death or treatment failure at 12 months, which it said should be explored further in other trials.

The Swiss firm said it would start discussions with regulatory agencies on the design of a study that would examine Tracleer’s effects on mortality and morbidity in pulmonary fibrosis patients.

Actelion’s shares were down more than 11% to 128.6 francs in mid-morning trading on the Zurich stock exchange.