Last Updated: 2007-03-23 11:00:16 -0400 (Reuters Health)

By Deena Beasley

LOS ANGELES (Reuters) - Amgen Inc. said on Thursday it discontinued a key clinical trial of colon cancer treatment Vectibix after discovering that the drug reduced chances of survival.

Amgen said an interim look at the trial found that colon cancer patients treated only with chemotherapy and Avastin, a biologic cancer drug sold by Genentech Inc., were more likely to live than patients who also received Vectibix.

"The fact that the drug had a negative impact on survival is shocking," said Geoffrey Porges, an analyst at Sanford Bernstein.

Shares of the world's largest biotechnology company, down about 13 percent year-to-date, fell nearly 5 percent in after-hours trading.

The stock's outlook was already clouded by recent medical studies linking anemia drugs, which account for more than half of Amgen's sales, to a higher risk of stroke, heart attack, blood clots and even death in certain patient groups.

The company warned in January that early results from the Vectibix trial showed no benefit in adding the drug to a regimen of chemotherapy and Avastin and that it was seeing increased side effects such as infections and pulmonary embolisms.

Vectibix, approved last year for later-stage colon cancer patients whose tumors have spread despite chemotherapy, is viewed as a key medicine in the development pipeline of Thousand Oaks, California-based Amgen.

LIKELY LIMIT TO LATER STAGE

Some analysts had predicted eventual sales of as much as $2 billion a year, but those forecasts hinge on its use in patients with earlier-stage cancer.

Vectibix competes with Erbitux, which is sold by ImClone Systems Inc. and Bristol-Myers Squibb.

Porges said U.S. regulators would probably now limit use of Vectibix to patients who have failed to respond to Erbitux as well as chemotherapy.

"Unfortunately, it appears that adding Vectibix to Avastin, when used in combination with oxaliplatin- or irinotecan-based chemotherapy, increased toxicity, without improving efficacy," said Roger Perlmutter, head of Amgen's research and development, in a statement.

Porges said the travails with the company's anemia franchise and Vectibix have created questions about management's judgment.

"Clearly, the future of the company now rests on denosumab," the analyst said, referring to a promising drug Amgen is developing as a treatment for osteoporosis and cancer.

The company said it is continuing to explore Vectibix in combination with chemotherapy in first- and second-line trials, with those results expected in 2009 or 2010.

Amgen's shares, which closed at $60.47 on Nasdaq, were trading at $57.65 after hours.