A once-daily formulation of the opioid analgesic tramadol failed to meet its objectives in a Phase III study, wreaking havoc with the shares of its developer Cipher Pharmaceuticals of Canada.

Shares in Cipher lost a third of their value after the results of the trial suggested that the CIP-tramadol ER formulation was no better than placebo in providing pain relief to patients with osteoarthritis of the knee or hip. The company said a bigger-than-expected benefit for the placebo group was behind the result.

Despite the disappointing results, Cipher said that it would continue to analyse data from the study, whilst noting that it still has a New Drug Application for the product under review by the US Food and Drug Administration, including data from other studies.

We believe there is sufficient data in the package to support regulatory approval," said Larry Andrews, Cipher's Chief Executive, in a statement. The company focuses on taking existing drugs, applying novel drug delivery technologies and then out-licensing the projects after approval.

"This is the latest in a series of six Phase III trials completed by Cipher for CIP-tramadol ER. The high placebo effect observed is disappointing; however, this is not an uncommon occurrence in placebo-controlled pain trials," he said.

CIP-tramadol ER would address a market valued at $1.6 billion last year in the USA, according to IMS data, with most tramadol products on the market requiring three- to five-times daily dosing. But once-daily products are starting to appear, including Biovail’s Tramadol ER which is already approved and another candidate from Labopharm which is under regulatory review. Cipher claims its product has a competitive profile versus the latter two products.

The product is based on a drug delivery technology developed by Cipher’s partner, Puerto Rico’s Galephar Pharmaceutical Research. This partnership has already yielded one approved product, Cipher’s cholesterol-lowering drug Lipofen (CIP-fenofibrate), which was approved in the USA and Canada in the first quarter of this year and will address a market valued at more than $1 billion a year in the US alone.

But the technology used in CIP-tramadol ER is different from that used in Lipofen and Cipher’s other major pipeline project, a novel formulation of the acne drug isotretinoin which is under review by the US Food and Drug Administration.

Shares in Cipher closed down 32% to C$2.90 yesterday.