The future for Eli Lilly’s diabetic eye disease drug Arxxant looks distinctly gloomy after the firm pulled its application for marketing approval in Europe just after suffering another setback from US regulators.

The European Medicines Agency said Lilly’s subsidiary in the Netherlands withdrew its application for Arxxant (ruboxistaurin) which was expected to be used for the treatment of moderate to severe non-proliferative diabetic retinopathy, ie damage to the blood vessels in the retina which can cause severe vision loss or even blindness. The application had been submitted to the EMEA last May was under review by the agency’s Committee for Medicinal Products for Human Use, but Lilly says it is not able to respond to the CHMP’s request for additional information within the allowed timeframe, hence the withdrawal.

The news came on the back of the US Food and Drug Administration’s rejection of an appeal by the company over the agency’s request for more detailed studies of the drug. The company had received an approvable letter for Arxxant last August but the following month, the FDA said it wanted a three-year, Phase III trial to bolster the application dossier. Lilly appealed the decision, saying at the time that such a study would take up to five years to complete five years, given the time needed to enroll patients and analyse the data.

Lilly says it does not intend to continue with its appeal and will consider its options, including conducting new trials, seeking a partner to help pay for them, or terminating the Arxxant programme altogether. It seems a sad end for the drug which not so long ago was tipped as a blockbuster.

Pension fund slams Lilly’s ‘dismal’ stock showing

Meantime, Lilly has been slammed by the USA’s largest pension fund that it needs to improve its "dismal stock performance and poor governance practices.”

The California Public Employees Retirement System (Calpers), which has assets totalling more than $230 billion has criticised Lilly and ten other firms from other sectors, saying that their “long-term performance…is at least 20% behind their peers, and they have resisted appeals to change corporate practices that make their boards unresponsive to shareholder interests." It notes that Lilly and baking giant Sara Lee “allow shareowners no opportunity to amend bylaws by employing restrictions used by only 4% of Standard & Poor's 500 companies.