Vectura's therapy misses primary goal in late stage lung disease trial

(Reuters) - Drugmaker Vectura Group Plc (VEC.L) said its asthma therapy Flutiform had not met the primary endpoint in a late-stage trial to determine its ability to treat COPD, a type of lung disease, sending the British firm's stock to its lowest in 21 months.

Flutiform had not significantly reduced the yearly rate of worsening conditions in patients with moderate and severe chronic obstructive pulmonary disease (COPD), versus mono-component LABA treatment, respiratory drug specialist Vectura said on Tuesday.

Vectura said its European license partner Mundipharma, which carried out the study, had indicated that these phase III result would prevent it from making a regulatory filing for COPD indication in Europe.

"Whilst several previous ICS/LABA studies have also failed to show a similar benefit, the news is clearly disappointing since it means Flutiform will remain limited to promotion for use in asthma," Stifel analysts wrote in a note.

With asthma and chronic obstructive pulmonary disease (COPD) affecting about 500 million people worldwide, the opportunity in the sector is considered massive, Goldman Sachs analysts estimated in a report last year.

Vectura agreed to buy rival SkyePharma in March for 441 million pounds, in a tie-up to create a lung disease group with expertise across different inhaler technologies.

The final-stage COPD trial involved 1,767 randomly picked patients in 16 countries, where neither the patients nor the administrator know the critical aspects of the experiment, guarding against both experimenter bias and placebo effects.

The primary endpoint compared the effects of Flutiform, used in an inhaler, to Formoterol Fumarate Dihydrate - used for the treatment of COPD, including chronic bronchitis, Vectura said.

"Whilst this result is disappointing, Flutiform continues to grow strongly based on the approved asthma indication, which continues to underpin our expectations for future growth of the product," Chief Executive Officer James Ward-Lilley said.

As an approved asthma treatment, Flutiform recorded a 42 percent rise in in-market net sales to 92.4 million euros ($103.3 million) in the six months ended June.

Stifel said the European approval for a breath actuated version of Flutiform in Europe, developed by Mundipharma and Skyepharma, is expected by the first half on next year and would be important in driving the treatment's sales growth.

Breath actuated inhalers automatically release a spray of medication when the person begins to inhale. The Stifel analysts confirmed their sales forecast of $520 million for Flutiform by 2020.

Vectura shares were down 4.95 percent at 130.7 pence at 0834 GMT, making them one of the biggest losers on the FTSE Midcap Index (.FTMC).

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Sunil Nair)