AtheroGenics Inc. is discontinuing the development of one of its investigational drugs following a Phase II failure.

News that AGIX-4207 missed its primary efficacy endpoint in the rheumatoid arthritis trial resonated with a negative ripple for shareholders. The company's stock (NASDAQ:AGIX) dropped $2.38 to close at $26.56.

Executives at AtheroGenics did not immediately return calls seeking comment.

Results of the trial, called OSCAR, showed that none of the three dosing arms of AGIX-4207 showed a statistically significant improvement in American College of Rheumatology (ACR) 20 scores when compared to placebo, the main endpoint. An ACR 20 score means that there was a greater than 20 percent reduction in swollen joint count and in tender joint count, as well as in three of the following five areas: patient's assessment of pain, patient's assessment of disease activity, investigator's assessment of disease activity, acute phase reactant (ESR or CRP) and patient's assessment of functional status.

The 12-week study, which took place in multiple European centers, involved 275 patients with mild to severe rheumatoid arthritis. They were randomized into four groups receiving either placebo or one of three single daily oral doses of AGIX-4207 (75 mg, 150 mg or 225 mg). In the final analysis, 25 percent of placebo-treated patients achieved an ACR 20 response after 12 weeks, compared with 20 percent at 75 mg, 15 percent at 150 mg and 23 percent at 225 mg.

Study subjects who previously were treated with biological disease-modifying anti-rheumatic drugs (DMARDs) were not enrolled in the study, nor were subjects who were taking non-biological DMARDs at the beginning of the study. Those on non-steroidal anti-inflammatory drugs (NSAIDs) including aspirin, COX-2 inhibitors and analgesics were allowed to remain on their drug regimens.

As a result of the study failure, the Atlanta-based company said it is discontinuing clinical development of AGIX-4207 in rheumatoid arthritis, although two secondary endpoints - tender joint count and morning stiffness - did show statistically significant improvement when compared to placebo. The drug was generally well tolerated, and serious adverse events were similar to placebo.

AtheroGenics said it believes the results to be compound-specific, adding that the V-Protectant technology on which AGIX-4207 is based still offers promise in yielding new therapeutics to treat rheumatoid arthritis. The company will maintain an active program to investigate second-generation V-Protectants in rheumatoid arthritis, from which it has identified other compounds with enhanced therapeutic potential within rheumatoid arthritis preclinical models.

V-Protectants are drugs that block oxidant signals, which are generated within endothelial cells. The oxidant signals activate genes, which produce inflammatory proteins, and the protein products of those selected genes, including VCAM-1, attract white blood cells to the site of chronic inflammation.

AtheroGenics said it would work to select another V-Protectant candidate to move into formal preclinical development for rheumatoid arthritis.

The drug development setback is a marked reverse from positive news released last month by the company. Its latest-stage product, AGI-1067, caused a stir when Phase IIb findings reported at a conference in New York showed a statistically significant plaque regression in those treated with the oral compound, which is designed to selectively block the inflammatory process in atherosclerosis, compared to the current standard of care. AtheroGenics' shares gained 64 percent on that news. (See BioWorld Today, Sept. 29, 2004.)

A pivotal trial of AGI-1067 will complete enrollment by the end of the year, and by the end of next year, AtheroGenics plans to evaluate and report the data, as well as submit a new drug application. Another clinical-stage product in its pipeline is AGI-1096, which the company said is in Phase I and is being developed for transplant rejection.