Abgenix Halts Arthritis Drug Development

Abgenix Inc. said it was abandoning development of an experimental rheumatoid arthritis drug because it failed to prove effective in patients enrolled in a phase II clinical trial.

The announcement sent shares of the Fremont, Calif.-based company down $1.98, or 6%, to $29.70 on Nasdaq.

The company said it will continue to explore using the antibody-based drug as a treatment for other diseases, including psoriasis. Some analysts are skeptical the drug will work for other diseases.

“The rheumatoid arthritis results could be a harbinger for psoriasis,” said Felicia Reed, an analyst with Boston-based Adams, Harkness & Hill Inc.

Reed said Abgenix has a promising cancer drug in phase II clinical trials, and the company is expected to begin tests on several other drugs this year.

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Associated Press