Genentech Won’t Seek Nerve Drug Approval

Genentech Inc. and its majority owner, Swiss drug maker Roche Holding Ltd., said they have decided not to seek U.S. approval of a drug to promote nerve growth after trials failed to show it worked. Separately, South San Francisco, Calif.-based Genentech said it may settle with U.S. authorities in California on charges of past improper promotion of its growth hormones. If the biotechnology company and the U.S. agree to the settlement and it’s approved by a court, Genentech said the $50-million fine would be recorded as a charge on its first-quarter earnings and wouldn’t have a lasting effect on operations. The nerve growth drug, called Neuleze, failed to meet the goal of a so-called Phase III study, generally the last phase of research required before a company seeks Food and Drug Administration approval of a product. The study was looking for an improvement in nerve function in diabetic patients with a nerve damage condition known as peripheral neuropathy. The two announcements come at a crucial time, as Roche must decide before July 1 whether it will buy the 33% of Genentech it doesn’t already own under a long-standing option agreement. Genentech shares fell 69 cents to close at $84.81 on the New York Stock Exchange.