Lilly, BioMS shutter MS drug program

A Phase III trial for an experimental new drug for multiple sclerosis backed by Eli Lilly and BioMS Medical failed to hit its primary endpoint and several secondary endpoints in a late-stage trial, and the two companies quickly announced that they were shutting down clinical trial work on the therapy.

Lilly forged a licensing pact for dirucotide in late 2007, paying $87 million upfront to the Canadian biotech and promising up to $410 million more in development and sales milestones. But after an initially promising start, the drug failed a mid-stage study. And with new pivotal data failing to show a delay in disease progression, the companies announced that they are stopping all ongoing studies on the drug. The failure is a significant setback for Lilly, which took charge of R&D work in the pact it struck with BioMS. For BioMS, though, it's a disaster. The company's stock plunged 50 percent when news hit of the mid-stage failure.

"We are obviously disappointed by this result and will be working closely with our clinical team to evaluate these data," BioMS Medical Chief Executive Kevin Giese. "We are fortunate to have suitable resources in place to remain flexible to pursue whatever options emerge once we understand these results more fully."

- here's the release
- read the report from Reuters