By Ben Hirschler
LONDON (Reuters) - An experimental drug for Duchenne muscular dystrophy (DMD) from GlaxoSmithKline and Prosensa failed to meet its goal in a late-stage clinical trial, sending shares in Prosensa tumbling 70 percent.
The slump wiped some $600 million off the market value of Dutch-based Prosensa, which only made its stock market debut on Nasdaq in June.
The drug, drisapersen, did not show a statistically significant improvement in the distance that patients could walk in six minutes compared with placebo in the Phase III test run by GSK, the companies said on Friday.
The setback may be good news for Sarepta Therapeutics, which is developing a rival treatment for the rare muscle-wasting disorder, though the news highlights the difficulties of developing effective treatments.
Sarepta shares rose 2 percent in early trade, after initially losing ground in pre-market dealings.
GSK and Prosensa had previously been seen as ahead of the pack in making a drug for the untreatable condition - a belief underscored by it having been awarded a "breakthrough therapy" designation by the U.S. Food and Drug Administration.
However, data released on GSK's website last month had already indicated a substantial number of patients treated with drisapersen might not be getting a meaningful drug effect.
The news is a fresh late-stage pipeline blow for GSK - Britain's biggest drugmaker - which reported on September 5 that an experimental cancer vaccine failed to help melanoma patients.
Up until now, 2013 has been a strong year for GSK research, with new drug approvals in HIV, cancer and respiratory disease. But finding a treatment for DMD, like developing a therapeutic cancer vaccine, was always a difficult prospect.
GSK and Prosensa now plan to study the clinical trial results in detail to see if drisapersen has a future.
"We appreciate that these results will be disappointing for boys with DMD and their families," said Carlo Russo, head of rare diseases research at GSK.
"We are committed to evaluating the outcome of this study in the context of the overall development program with experts in the field and we expect such evaluation to help inform our next steps for drisapersen. It is our hope that progress will be made in an effort to help boys with DMD."
Industry analysts, however, are not optimistic. James Gordon of JP Morgan said a regulatory filing for the medicine was now "very unlikely".
GSK has an exclusive worldwide license to develop and commercialize drisapersen and other experimental DMD drugs from Prosensa. The Dutch firm is eligible for up to 428 million pounds ($687 million) in milestone payments from GSK and percentage royalties in the low teens on any future sales.
($1 = 0.6226 British pounds)
(Editing by Elaine Hardcastle and David Holmes)