AstraZeneca’s shares have slipped on the news that a heart disease drug developed by US partner AtheroGenics has fallen at the Phase III hurdle.

AtheroGenics, whose own stock sank over 60%, says that an initial analysis from a 6,100-patient Phase III trial, called ARISE, showed that AGI-1067, an anti-atherosclerotic agent, did not meet its primary endpoint of reducing the risk of death, myocardial infarction, stroke, and other cardiovascular complications. However, the Georgia-based firm was remarkably upbeat about the drug’s prospects and said that AGI-1067 “did achieve a number of other important predefined endpoints,” notably in patients suffering from diabetes.

Given this positive note, AtheroGenics, which stated that full details of the Phase III study will be presented at the American College of Cardiology meeting in New Orleans next week, “currently intends to continue to pursue opportunities for development.”

Whether that will happen with AstraZeneca still on board remains to be seen. The two firms will now work together to fully analyse the full data set for AGI-1067, but under the terms of the licensing deal, AstraZeneca has 45 days to decide whether or not to continue with the collaboration. That agreement was signed in December 2005 and could have been worth up to $1 billion to the US biotechnology group.

AstraZeneca has only paid out $50 million as an upfront payment when the deal was signed, so the financial effects of AGI-1067’s failure on the Anglo-Swedish drugmaker are hardly substantial. However, another late-stage disappointment is something that the firm could do without, especially after the number of Phase III failures it suffered last year. 2006 saw the termination of an intravenous formulation of AZD7009 for the treatment of atrial fibrillation, while Galida (tesaglitazar) for diabetes and blood clot preventer Exanta (ximelegatran) also failed to make the grade.

Positive data for sustained-release Seroquel

On a brighter note, AstraZeneca, presented positive data from two clinical trials of a new sustained-release formulation of its antipsychotic blockbuster Seroquel (quetiapine). The results, presented at the European Congress of Psychiatry in Madrid, Spain showed that Seroquel SR, administered once daily, significantly improved symptoms associated with schizophrenia and increased the time to psychiatric relapse, when administered through a three-step dose initiation aimed at reaching the effective dose range on the second day of treatment.

Seroquel generated revenues of $3.4 billion last year and the drug’s patents are set to expire in 2011. The sustained-release formulation was submitted to regulators in the USA and Europe for approval in 2006 and AstraZeneca hopes to get the go-ahead for the new product sometime this year.