Rituxan didn't reach its main goal of slowing disability for people with primary progressive multiple sclerosis after almost two years of treatment, compared with a placebo, the companies said in a statement. If the trial had succeeded, it would have made Rituxan the first drug to work against the primary progressive form of MS, or PPMS.

Rituxan, a blood-cancer drug that's also approved for rheumatoid arthritis, generated $2.29 billion in U.S. sales in 2007. It is designed to work by killing inflammatory B cells, a different approach than approved MS drugs. About 400,000 people in the U.S. have MS, and one in 10 have the primary progressive form that gradually damages nerve fibers over time without remissions, according to the National MS Society.

``While the primary results are not what we had hoped, we continue to believe in the potential of B cell therapy for patients living with MS,'' said Michael Panzara, Biogen's vice president and chief medical officer of its neurology strategic business unit.

Genentech, majority-owned by Switzerland's Roche Holding AG, fell 63 cents, or less than 1 percent, to $74.06 at 4 p.m. on the New York Stock Exchange. Cambridge, Massachusetts-based Biogen, a co-promoter of the drug, rose $1.21, or 2 percent to $64.93 on the Nasdaq Stock Market.

Revenue Opportunity

``This would have presented a revenue opportunity of more than 500 million Swiss francs for Roche but was not included in our model or consensus estimates,'' Deutsche Bank analysts including Michael Leuchten said in a note to investors today. ``PPMS is a tough part of MS to treat and nothing has worked in this setting so far.''

Multiple sclerosis is diagnosed when the body's immune system goes awry and begins attacking the fatty insulating tissue around nerve fibers, called myelin, according to the National MS Society.

The Rituxan trial, called Olympus, followed 439 patients for two years after they took an infusion of Rituxan or a placebo. Patients took a repeat course of Rituxan every six months, said Craig Smith, neurology lead clinical scientist in the immunology department at Genentech, in a telephone interview before the announcement.

Side Effects

Patients were monitored for the status of their disability, to see, for example, whether they were losing their ability to walk, see clearly, or maintain strength in their arms, Smith said. A secondary goal of the study looked at whether the drug reduced brain lesions.

More patients had serious side effects on Rituxan than on placebo, Genentech and Biogen said. The rate of serious side effects was about 16.4 percent in the Rituxan group, compared with 13.6 percent on placebo. About 4.5 percent of Rituxan patients had serious infections, compared with 1 percent on placebo. There was some evidence that the drug was working biologically, although the companies didn't specify how much in the statement.

Genentech and Biogen plan to continue analyzing the results and submit them at a future medical meeting, the companies said.

Double Vision

People in the trial were about 48 years old on average, and had been diagnosed with primary progressive MS four to 10 years before enrolling in the study, Smith said. They entered the study with an average disability score of 4 on a scale of 1 to 10, meaning they lacked some coordination, or had some double vision or weakness, although were still able to walk without assistance, he said.

Previously, Rituxan was studied for patients with the most common form of MS, the relapsing, remitting form. That study, called Hermes, found that one in five patients on Rituxan relapsed, while twice as many on placebo had a recurrence in a 48-week clinical trial, according to research published in February in the New England Journal of Medicine.

Existing drugs, including Biogen's Avonex, Bayer AG's Betaseron, Merck KGaA's Rebif and Teva Pharmaceutical Industries Ltd.'s Copaxone, work differently than Rituxan by blunting the attack of immune system T cells. None of the drugs have shown a benefit for patients with the primary progressive form of the disease, Smith said.

Next Steps

The market for MS drugs exceeded $5.5 billion in 2006 and is expected to double by 2013, according to market-research firm Frost & Sullivan in New York. Rituxan costs $20,514 a year for two infusions for patients with rheumatoid arthritis, said Genentech spokeswoman Nikki Levy.

``Right now we are reviewing all the data from Olympus and determining next steps regarding our development program,'' Levy said yesterday in an e-mail.

The company still plans a mid-stage clinical trial of ocrelizumab, a second-generation drug that blocks the same protein on B cells as Rituxan. The newer drug will be studied against the relapsing, remitting form of MS, Levy said.

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