Novartis has received disappointing news from partner Idenix Pharmaceuticals that it is halting development of the hepatitis C treatment valopicitabine on advice from US regulators.

Shares in Idenix sank over 38% to $3.57 when the firm announced that, after discussions with the US Food and Drug Administration, the development programme of valopicitabine has been placed on clinical hold “based on the overall risk/benefit profile observed to date.”

Jean-Pierre Sommadossi, Idenix’ chief executive, said that the firm is "disappointed with the FDA's perspective on the programme," and is working with Novartis to evaluate its options for the drug. But, in a conference call later, he suggested that those options are pretty gloomy.

Indeed, given that the benefit of the drug was not enough to offset the risk of gastrointestinal side effects such as nausea and vomiting, Dr Sommadossi stated in the call that he was not optimistic that the drug has any future in further clinical development.

The company said the FDA did an independent review of two Phase IIb trials and a drug interaction trial, and the issue ultimately came down to the aforementioned gastrointestinal side effects experienced during the early weeks of treatment. "We reached the same quantitative analysis, we just felt the drug deserved one more set of tests to see if we could find the right dose, and they disagreed," noted Doug Mayers, chief medical officer.

Novartis signed up to valopicitabine in March last year and would have paid up to $525 million. The deal came just days after Idenix said it would delay Phase III trials of the compound after seeing gastrointestinal side effects with the drug and was going to test it at lower doses.

Idenix 'committed' to antivirals

It now seems that valopicitabine will be consigned to the dustbin but Dr Sommadossi said that the firm remains “committed to building a leading antiviral franchise and will continue to focus on ensuring a successful launch of Tyzeka/Sebivo (telbivudine) and on advancing our pipeline."

Sebivo, which is also partnered with Novartis, was recently approved by the European Commission as a once-a-day oral treatment for adult patients with chronic hepatitis B and evidence of viral replication and active liver disease, and it has also received the go-ahead in the USA, Canada, Switzerland and China.

As of June 30, Idenix had approximately $160 million in cash and equivalents and chief financial officer Ronald Renaud noted that “over the next few weeks, we will be taking a critical look at our expenses.” But he added that "our balance sheet is strong and we believe that we have enough cash to fund early clinical development of the pipeline."

Novartis’ shares also suffered, slipping 1.3% to 66 francs, a new low for the year. What is worse, the failure of valopicitabine came just a day after another of the Swiss major’s partners, Antisoma, said that an experimental drug, ASA404, has failed in a mid-stage clinical trial for ovarian cancer.