In a high-stakes clinical trial of 16,500 people, GlaxoSmithKline's (GSK's) inhaled medicine Breo failed to extend life in patients with chronic respiratory disease, crashing the hopes of a sales boost for the drug.
GSK's shares fell 1.5 percent, lagging a strong London market, in reaction to the news announced by the company and its partner Theravance. Investors had hoped the study would boost sales for the medicine by billions of dollars.
Drug Breo was approved in 2013 for chronic obstructive pulmonary disease (COPD) but sales of the drug have been slow to take off. COPD is a leading cause of death worldwide that is often referred to as smoker's cough. Study says while Breo did reduce the risk of dying by 12.2 percent compared to placebo, the difference was not big enough to be deemed statistically significant. If there was a positive result Breo would have been the first drug to show a survival benefit in patients with COPD. The rate of decline in lung function and heart problems was reduced in patients who used Breo.
Nine years ago, a very similar study with GSK's older drug Advair, involving 6,100 patients, also narrowly failed.
Current consensus forecasts point to Breo sales of $1.55 billion by 2020, according to Thomson Reuters Cortellis. Effect on survival is unclear in inhaled drugs such as Breo that combine a steroid and a long-acting beta agonist (LABA) . Advair, is also widely used to treat asthma.
Sometimes known as "son of Advair", once-a-day Breo has a dosing advantage over twice-daily Advair. But it has struggled at a time when GSK has been forced to cut Advair prices, with sales a modest 94 million pounds ($145 million) in the first half of 2015.
"Even if results had been positive, it was never clear how impactful they would be because physicians largely view Breo and Advair as interchangeable, and Advair is very well-entrenched," Bernstein analyst Tim Anderson said in a research note.