Genentech stock tumbles as drug fails test

Genentech Inc.'s shares fell more than 6 percent Tuesday morning after the company said the drug Rituxan, which it is developing with Biogen Idec Inc., failed in a clinical trial against lupus.

The drug, discovered by Cambridge, Mass.-based Biogen Idec (NASDAQ: BIIB), is already used to treat a type of non-Hodgkin's lymphoma, for which it was approved by regulators in 1997. Earlier this year the Food and Drug Administration approved its use in combination therapy to treat rheumatoid arthritis.

The companies have been trying it out for other uses, hoping to earn more money from the drug. This test, a Phase II/III trial in 257 patients, was aimed at lupus, an autoimmune disease in which the body attacks its own joints, skin, kidneys, heart, lungs and other tissues.

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After 52 weeks of testing, the drug didn't meet its primary endpoint compared with a placebo. Nor did it meet any secondary endpoints in the study.

Genentech (NYSE: DNA) is based in South San Francisco. On Tuesday, its shares closed at $67.93 each, down $5.23 or 7.15 percent.