An experimental cancer drug from Britain's Antisoma Plc and Swiss-based Novartis AG has failed in a mid-stage clinical trial for ovarian cancer, lopping 15 percent off Antisoma's market value.

Antisoma said on Thursday that new Phase II data showed ASA404 did not increase the median time to tumor progression when added to chemotherapy.

More women died in the ASA404 arm of the study than in the control group but the majority in both were still alive after one year, so no median survival values were determined.

Based on these data, development in ovarian cancer will not be a priority, Antisoma said in a statement.

ASA404, which Antisoma licensed to Novartis in April 2007, is being tested in several cancer types. Previous trials showed it did increase median survival when added to chemotherapy in non-small cell lung cancer and Antisoma Chief Executive Glyn Edwards said he remained optimistic about the overall program.

Our ovarian cancer trial has not produced positive results like those seen with ASA404 in lung cancer. More broadly, we're very pleased with the progress made by Novartis to date with ASA404 in lung cancer and look forward to working with them to fully evaluate the drug in other cancers, he said.

David Epstein, head of oncology at Novartis, said in April he believed the product had the potential to sell more than $1 billion a year.

Investors, however, were unnerved by the setback, and Antisoma shares ended 15 percent lower at 37 pence, after hitting a seven-month low of 34p. Novartis was 0.2 percent higher at 66.85 Swiss francs, slightly underperforming a firmer market for European drug stocks.

CHEQUERED HISTORY

Denise Anderson, an analyst with Kepler Equities in Zurich, said ovarian cancer was a particularly difficult cancer to treat, so it was not possible to draw firm conclusions about whether the drug would work in many other tumor types.

But she said its peak sales potential was at least $500 million lower following the news.

Antisoma received an upfront payment of $75 million from Novartis for ASA404 in April and could receive as much as $890 million if a series of milestones are met and the Basel-based firm acquires rights to a second related drug.

The medicine, which was previously known as AS1404, has had a chequered history.

Novartis's cross-town rival Roche Holding AG, which has a broad drug-discovery alliance with Antisoma, announced a year ago it was dropping AS1404, following initial clinical trial results that failed to live up to early expectations.

Dresdner Kleinwort analysts said the latest setback did not reflect well on Novartis's ability to pick experimental drugs but it was always to be expected that more Phase II drugs would fail than succeed.

ASA404 is due to enter final Phase III trials in lung cancer next year and, if successful, could be the first in a new type of anti-cancer drugs designed to disrupt the flow of blood to tumors.

It works in a different way to Roche's established medicine Avastin, which also starves tumor cells of blood, and is expected to help the 25 to 40 percent of patients with squamous non-small cell lung cancer (NSCLC) who cannot take Avastin.

NSCLC is the most common form of lung cancer, accounting for about 80 percent of cases.

United kingdom Medicine Cancer