SPARC's drug Vibozilimod fails in both clinical trials; company halts research. SPARC shares plummet 20%, hitting a lower circuit of ₹156.50.
SPARC Share Fall: Sun Pharma's research unit, SPARC (Sun Pharma Advanced Research Company Limited), experienced a sharp decline in its share price on Wednesday. The company's new drug, SCD-044 (Vibozilimod), failed in both phases of its clinical trials, leading to the company's announcement to halt further development. This news triggered investor panic, resulting in an approximately 20% drop in SPARC's share price.
Shares Plunge to Lower Circuit
During trading on the BSE, SPARC's share price fell to a lower circuit of ₹156.50. The selling pressure was so significant that a lower circuit breaker had to be implemented to halt trading. While a slight recovery was observed by the end of the day, investor confidence has been severely impacted.
Intended Use of the Drug
SCD-044 was a research-based drug being developed to treat two skin diseases—psoriasis and atopic dermatitis. The company conducted two separate trial programs:
- SOLARES PsO, for psoriasis
- SOLARES AD, for atopic dermatitis
The drug failed to deliver expected results in both trials.
Details of the Clinical Trials
According to the company, the psoriasis clinical trial involved 263 patients, while the atopic dermatitis trial included 250 participants. SCD-044 was tested at three different dosages in these trials and its efficacy was compared to a placebo.
However, the results clearly indicated that Vibozilimod did not show the expected effect and failed to achieve the primary endpoints.
Company's Response: Research Halted
In light of these results, SPARC has announced that it will not pursue further research on this drug. This decision is considered a significant shift in the company's strategy and research direction. This move has dealt a blow to investors who had anticipated increased revenue from this drug.
Limited Impact on Sun Pharma
The news had a relatively limited impact on SPARC's parent company, Sun Pharma. Sun Pharma's shares declined by only 0.47% on Wednesday, trading at ₹1,659.80. This is primarily because SPARC is an independent research wing and its operations are largely separate from Sun Pharma's core business.
Company Statement
Marek Honczarenko, Senior Vice President, Global Specialty Development at Sun Pharma, expressed disappointment with the results. He stated that the clinical trial outcomes highlight the inherent risks in research and development. While expressing confidence in the company's future endeavors in developing better drugs, he confirmed that this particular project will not be pursued further.
The Risk of Pharmaceutical Research
The SPARC case illustrates the substantial risks associated with research and innovation in the pharmaceutical sector. Bringing a new drug to market requires years of work and significant investment, but if it fails in trials, all that effort and investment is lost.
