Biotech firm Genelabs will have to conduct another clinical trial before the US Food and Drug Administration will consider approving its candidate drug for the autoimmune disease systemic lupus erythematosus.

The FDA asked for an additional Phase III trial of Prestara (prasterone) on Friday, throwing the future development of the drug into doubt. Genelabs has said it does not have the funds in hand to carry out another trial of that scale, so will have to find a partner to take Prestara forward. Failing that, it may have to discontinue the programme.

The outcome of discussions between Genelabs and the FDA is not wholly surprising, given that the company reported last April that Prestara had been unable to show any benefit on BMD in a confirmatory Phase III trial.

In a significant departure for the project, Genelabs has said it will no longer seek approval preventing bone mineral density declines in lupus patients, even though it received an ‘approvable’ letter from the FDA in this use in 2002. Rather, the company said it will pursue a broader use for the drug in improving the signs and symptoms of lupus, as the BMD indication no longer looks viable.

To carry out that trial, Genelabs may approach its marketing partner for Prestara, Watson Pharmaceuticals, for help. The two companies have an agreement giving Watson exclusive North American marketing rights to the drug, although Genelabs has responsibility for funding and carrying out all the development work under that agreement.

Lupus is a chronic inflammatory disease which affects joints, muscles and other parts of the body, and has been a tough nut for drug companies to crack, with no new treatments for the disease reaching the market in the last 40 years.

There has been a string of major product disappointments in recent years. For example, Human Genome Sciences saw the value of its shares drop by a third last October when it reported disappointing Phase II data on its Lymphostat-B (belimumab) candidate, licensed to GlaxoSmithKline. And earlier in 2005, La Jolla Pharmaceuticals had to shed staff after failing to win approval fort Riquent (abetimus sodium), a treatment for lupus kidney disease.

One hope for sufferers of the disorder lies with Genetech/Biogen Idec’s cancer drug Rituxan (rituximab), which is already on the market for non-Hodgkin’s lymphoma but has shown a benefit in lupus in Phase II trials and has now advanced into late-stage testing.