Shares in Cardiome Pharma Corp have taken a thumping after the Canadian firm revealed that partner Merck & Co has decided to discontinue further development of the oral formulation of the anti-arrhythmic vernakalant.

The decision was based on "Merck’s assessment of the regulatory environment and projected development timeline", Cardiome notes, stating that oral vernakalant was being evaluated as maintenance therapy for the long-term prevention of atrial fibrillation (AF) recurrence. The drugs giant already markets the intravenous form of the drug, as Brinavess, in the European Union and Latin America for the rapid conversion of recent onset AF and is looking to launch the product in 30 additional countries in 2012.

Cardiome chief executive Doug Janzen said “it is our understanding that vernakalant oral has continued to have a safe and effective profile as demonstrated by studies conducted since the product was licensed" in 2009. He added that "we are extremely disappointed with the decision Merck has made”, though the firm will continuing to work with the US major on the worldwide development and commercialisation of vernakalant IV".

The news came as a surprise to analysts, and Merck itself had issued no information about the move at time of writing. Some observers believe the company's decision may have been influenced in some part by the US Food and Drug Administration's decision in December to add more warnings to the label of Sanofi's anti-arrhthymic Multaq (dronedarone) following a trial which showed the drug increased the risk of serious cardiovascular events when used by patients with permanent AF.

As for Cardiome, the Vancouver-based firm said that in response to the discontinuation of the oral vernakalant programme, it will reduce its annual operating cash burn by half to a target of C$11 million. The company added that it is reviewing the impact of the news on its business strategy moving forward, and investors are very worried; the stock sank nearly 54% to close at C$0.88.