Shire drops Dermagraft for venous leg ulcers, after Ph III failure

Ireland-headquartered drugmaker Shire (LSE: SHP) says that Advanced BioHealing (ABH), the USA-based regenerative medicine business bought recently for $750 million (The Pharma Letter May 18), has concluded its Phase III pivotal trial of Dermagraft in subjects with venous leg ulcers. Following preliminary analysis of the top-line results, the decision has been made not to pursue the venous leg ulcer (VLU) indication.

Dermagraft is a regenerative bio-engineered skin substitute indicated for use in the treatment of diabetic foot ulcers (DFUs) greater than six weeks in duration. It has already achieved 5% patient share of the potential $3 billion slow healing DFU market and had $146 million in US sales in 2010.

Analysts at UBS says it estimated that VLU would have been a $160 million opportunity for Dermagraft, and removing it from its figures, and adjusting for currency yields, leads them to cut their target price for Shire’s shares to 2,380 pence, down from 2,400 pence. However, the analysts, quoted by Reuters, say that discussions with a key opinion leader suggest that the diabetic foot ulcer market is a much larger one for Dermagraft, with the broker estimating around a $500 million opportunity in that indication by 2020.