Sepracor shares drop as new GERD agent trials are suspended by partner J&J

Sepracor saw its share price plummet 19.3% to $34.34 on April 23 afterthe company reported that Phase II trials of a new drug for gastroesophageal reflux disease, ticalopride (norcisapride), had been halted by its partner, Johnson & Johnson subsidiary Janssen Pharmaceutica. Shares of J&J also dipped marginally (by 21 cents) to $91.90 on the news.

In Sepracor's first-quarter 2001 results statement, the firm noted that Janssen had decided to suspend the clinical trials "pending further analysis of a small number of adverse events reported in GERD and diabetic patients." Although it is unknown whether these events are directly related to the drug, Janssen decided it would be "prudent" to suspend the trials. Neither company has given an indication of how long the program for ticalopride will be on hold.

Ticalopride is a single-isomer version of J&J's Propulsid (cisapride), which was withdrawn from the market last year after being linked to 302 fatalities and evidence that it caused heart rhythm disorders (Marketletter April 3, 2000). Sepracor had contracted with J&J to develop the single-isomer form in the hope that it would improve the safety of the product. Propulsid was an enormous brand for J&J, with sales approaching $1 billion a year when it was pulled, and the hope was that ticalopride would recapture a significant slice of its parent's share of the GERD market.