Bristol-Myers Squibb Co. (BMY) has suspended its study of a drug intended to treat hepatitis C based on the "emergence of a serious safety issue." The move raises questions about the drug's potential and the $2.5 billion price tag Bristol paid earlier this year to buy the company that developed it. The suspension could pose a major setback for the drug-maker--which has been grappling with weak sales of Plavix its blockbuster anti-clotting drug that lost patent protection in May--in the race to treat hepatitis C. Late Wednesday, Bristol-Myers said it voluntarily suspended the ongoing Phase two study of BMS-986094, which was formerly known as INX-189, a nucleotide polymerase inhibitor. In a statement, the company said "the cause of the safety issue and any potential relationship to study drug are unknown at this time." Its treatments had formerly shown promise in clinical testing. The drug company is currently assessing all patients in the study and following an evaluation of the patient data, will decide what to do. Bristol-Myers, Gilead Sciences Inc. (GILD), Abbott Laboratories (ABT) and others are racing to bring an all-oral hepatitis C regimen to market, hoping to tap what is expected to be a multibillion-dollar market for such a therapy. The treatment would eliminate an injectable drug used in the current standard treatment, interferon, which can be difficult for patients to tolerate. Gilead shares surged 10% to $59 premarket, while Bristol-Myers and Abbott were inactive. In January, Bristol-Myers said it was buying hepatitis C drug developer Inhibitex Inc. for about $2.5 billion at a whopping 163% premium. Treatment for hepatitis C, a disease of the liver, is considered lucrative because the disease is prevalent in large sections of the global population. The virus, which can be transmitted sexually or through use of shared needles and at tattoo parlors, affects some 170 million people world-wide. Last week Bristol-Myers reported a 28% profit decline on a double-digit drop in sales as Plavix's second-quarter sales tumbled 60% from a year earlier. Sales also were pressured by the March patent expiration for blood-pressure drugs Avapro and Avalide. Through Wednesday's close Bristol's shares have surged 27% in the past 12 months. Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com Subscribe to WSJ: http://online.wsj.com?mod=djnwires
