SPARC shares slump 20%, Sun Pharma also declines amid failed drug trials

Shares of Sun Pharma Advanced Research Company Ltd (SPARC) plummeted by nearly 20 per cent on Wednesday following an announcement that its partner, Sun Pharmaceutical Industries Limited (SPIL), had released top-line results from Phase 2 clinical trials. These trials evaluated the drug Vibozilimod (SCD-044) for treating moderate-to-severe psoriasis and atopic dermatitis.

The studies, namely SOLARES PsO and SOLARES AD, failed to meet their primary endpoints of achieving a 75 per cent improvement in both the Psoriasis Area and Severity Index (PASI) and the Eczema Area and Severity Index (EASI) by Week 16. Consequently, Sun Pharma and SPARC are set to evaluate their next steps regarding SCD-044.

Sun Pharma's shares experienced a 0.47 per cent decline, trading at Rs 1,659.80, alongside the sharper fall in SPARC shares to Rs 156.50 on the BSE. The company disclosed that the Phase 2 trials for psoriasis included 263 participants and were conducted as randomised, double-blind, placebo-controlled studies.

Sun Pharma has decided to discontinue further studies of SCD-044 for atopic dermatitis. The Phase 2 study for this condition involved 250 participants and tested three different dosages against a placebo. Despite the trials' failure to meet primary objectives, Sun Pharma reported no major safety concerns associated with the drug.

Marek Honczarenko, Senior Vice President and Head of Global Specialty Development at Sun Pharma, expressed disappointment with the trial outcomes. “While we are disappointed with the top-line results of the clinical trials, we would like to thank all the psoriasis and atopic dermatitis patients, the healthcare professionals and administrators who participated in these pivotal clinical trials,” noted Honczarenko.

The market reaction reflects the significant implications for Sun Pharma and SPARC as they reassess their strategies for SCD-044. The disappointment in the clinical results also underscores the challenges in developing new treatments within the pharmaceutical industry.

SPARC and SPIL are currently in discussions to determine the best course of action post-trial. The companies have stated, "SPARC and SPIL will evaluate the appropriate next steps for SCD-044." This decision marks a pivotal moment for both firms as they navigate the next phase of drug development and strategy.

The pharmaceutical sector keenly observes these developments, as similar treatments in the pipeline could be affected by this outcome. As competitors continue their development, the focus will remain on innovation and strategic realignment.