XenoPort shares skid after MS drug proves to be a lemon in PhIII

Shares of XenoPort skidded lower this morning after the biotech announced its lead experimental drug had decisively failed a late-stage study for spasticity triggered by multiple sclerosis. The troubled biopharma company, which has been struggling to spur sales for the approved drug Horizant for restless leg syndrome, immediately opted to bury the program.

Santa Clara, CA-based XenoPort ($XNPT) didn't spell out the data, but the drug--arbaclofen placarbil--failed the co-primary endpoints in a comparison with a placebo. The biotech had reasoned this in-house program would deliver a new therapy that could perform significantly better than racemic baclofen, which is already approved for spasticity.

XenoPort's shares plunged 18% on the news of the failure.

The Phase III failure comes at a particularly bad time for XenoPort. GlaxoSmithKline ($GSK) held the commercialization rights for Horizant in the U.S. but agreed to hand over control after the biotech accused the big pharma company of bungling the launch. GSK recorded a mere $6.5 million in sales for the drug last year, and XenoPort picked up responsibility for the numbers on April 30-- even as GSK reported shortages of the therapy.

Now that the late-stage program has been unceremoniously dumped, XenoPort also plans on advancing XP23829-an early-stage drug for MS and psoriasis-through the pipeline.

"We are obviously disappointed that the co-primary efficacy endpoints were not met," CEO Ronald Barrett said. "We will be working diligently to shut down all activities related to AP development, and plan to provide an update in the future on the impact of these expected savings on our cash burn guidance. We remain committed to allocating our resources to build value through the focused commercialization of Horizant and advancing the development of our novel fumarate product candidate, XP23829."

- here's the press release

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