Vanda Pharmaceuticals shares in the red as skin disease test fails

Vanda Pharmaceuticals' shares fell on the news its experimental skin drug tradipitant failed a phase 3 trial. (Nasdaq)

Vanda Pharmaceuticals is hoping to try again with an amended trial after its experimental skin drug tradipitant failed a phase 3 test.

The drug was being assessed to see whether it could help pruritus (itching) in patients with in atopic dermatitis. In an update Tuesday, it seems it couldn’t: “The EPIONE study did not meet its primary endpoint in reduction of pruritus across the overall study population,” the biotech said in a statement.

Vanda's shares were down 2.5% premarket on the news.

But it did see a glimmer of hope, adding that the antipruritic effect of tradipitant “was robust in the mild AD study population.” The company will now amend its trial to treat these patients, which it says is around 60% of the U.S. atopic dermatitis population.

The company reckons it can still tease out a win by moving the goalposts and says the flop may be due to distinct underlying pathology of mild versus more severe forms of atopic dermatitis.

Analysts at Jefferies said that, given this, it will amend its second test, known as EPIONE 2, to focus on mild atopic dermatitis with pruritus. But the firm warned in a note to clients Wednesday morning: “While we like this targeted approach, we caution post hoc analysis nature and unclear regulatory pathway.”