AZ stops Galida development

AstraZeneca's (AZ) pipeline hopes suffered another dent after the company said it had cancelled development of its late-stage diabetes drug, Galida.

The news will come as a blow to the Anglo-Swedish firm, which had been hoping to strengthen a pipeline that has been hit by high-profile failures in the past couple of years. Galida had reached phase III clinical trials and was regarded as a promising new treatment for type 2 diabetes.

For its part, AZ had warned investors that the Galida project came with several risks. The firm said that, after analysing results from the first four of eight phase III clinical trials and one phase II trial, it had concluded that the drug was ìunlikely to offer patients significant advantage over currently available therapyî.

AZ added that there was no immediate safety concern for the 2,245 patients taking Galida within clinical trials. The trials will now be brought to a close and doctors will be advised to switch patients to alternative therapies.

ìWe have acknowledged that Galida was in a class with a high degree of uncertainty and the decision to discontinue is disappointing,î said AZ chief executive, David Brennan, in a statement.

Analysts said they were not overly surprised by the news, as there had already been concerns about the drug's overall risk-benefit profile.

ìGalida was put under a cloud well over a year ago when AZ placed its development under review,î said Williams de Broe analyst, Peter Cartwright. ìHowever, pulling another phase III product is not good and emphasises the need for AstraZeneca to fill its pipeline.î

AZ has recently appointed John Goddard, previously chief financial officer, to oversee the company's licensing strategy, in a bid to buy in more drugs to bolster the pipeline.

ìIt's apparent to me and a number of people on the management team that there are more external opportunities that we should be taking advantage of,î said Brennan.

Cartwright described Goddard's appointment as a ìreaction to eventsî.

ìAZ's cupboard is looking bare and they needed to do something about it,î he commented.

In February, AZ withdrew its controversial anticoagulant, Exanta, from the market and terminated its development due to links with liver injury.