Mon 2:36 pm by Olivia D'Orazio

Novartis Pharma’s (NYSE:NVS) SMC021 drug, intended for the treatment of post-menopause osteoporosis, failed to meet the endpoints of phase three study, Study 2303, according to its development partner, Unigene Laboratories (OTCBB:UGNE).

The placebo-controlled study was to assess the safety and efficacy of the drug, an oral formulation of calcitonin, which used Emisphere Technologies’ (OTCBB:EMIS) proprietary oral delivery technology, Unigene said.

The results of the study showed that the drug failed to demonstrate a significant difference between treatment groups at the end of the three-year study. Novartis said the only statistically significant result was an increase in the lumbar spine bone mineral density in the group treated with SMC021, compared to the placebo arm.

However, the data did show a positive safety profile for the drug, Novartis said.

Osteoporosis is a disease that causes bones to become brittle, making them more likely to break. it is common in men and women over the age of 50, and, since it has no outwardly signs or symptoms, is usually only diagnosed following a bone fracture.

The prevalence of the condition among post-menopausal women is growing, and osteoporosis now accounts for more days spent in the hospital than many other diseases, including diabetes, heart attack and breast cancer, in women over 45 years of age.

Calcitonin is a natural hormone that has been used to treat bone diseases including osteoporosis for over 25 years. Oral calcitonin might replace injections, and challenge nasal delivery of calcitonin.

Unigene president and CEO, Ashleigh Palmer, commented: “While we would have preferred positive results from this Phase 3 trial, the outcome has very limited impact on Unigene’s successful turnaround strategy.

“Unigene’s own oral formulation of salmon calcitonin reached Phase 3 statistical significance for its primary endpoint as presented in detail at the American Society of Bone and Mineral Research in September.

“Although today’s news reduces the likelihood of near-term royalties under our manufacturing license with Novartis, it ironically now places Unigene in an exceptionally strong leadership position with respect to our oral peptide drug delivery platform.”

Under the terms of Novartis’ agreement with Unigene, signed in April 2004, Unigene would receive a total of $18.7 million, before royalties, in exchange for the worldwide licensing rights to manufacture calcitonin using Unigene’s patented peptide production process. Unigene is also entitled to receive single-digit royalties on net sales of any existing or future Novartis product that uses this technology.

To date, Novartis has paid $13.7 million in milestone payments to Unigene under this agreement.

In new York, Novartis shares fell 0.77 percent to $55.22, while Unigene shares on the OTC Bulletin Board sank nine percent to $0.91, as of 1:43 pm EDT.

Meanwhile, Emisphere shares, also on the OTC Bulletin Board, plunged 76.1 percent, or $1.21 per share, to $0.38 as of 1:31 pm EDT.