SPARC shares fall 138% after Sun Pharma's key psoriasis drug fails to get desired outcome

Shares of Sun Pharma Advanced Research Company (SPARC), a unit of India's largest drug maker Sun Pharmaceuticals Ltd. fell as much as 13% on Wednesday, June 4, after it announced results from its Phase 2 trials of the SCD-044 drug.

The SCD-044 or Vibozilimod was being tested in the treatment of psoriasis and atopic dermatitis.

Sun Pharma disclosed that the drug did not meet primary endpoints in either study and as a result, the development of the SCD-044 is being discontinued with no further clinical trials being planned.

Both Sun Pharma and SPARC will now assess the next steps for the compound.

This is a negative development, especially because the drug was considered to be one of the key assets in the company's specialty pipeline.

CNBC-TV18 had also exclusively reported on Wednesday that a surprise inspection was underway at Sun Pharma's Halol facility, with three inspectors from the US Food & Drug Administration inspecting the facility.

Sun Pharma's Halol unit was last inspected in May 2022 and is currently under an import alert post the warning letter. Halol is one of Sun Pharma's largest facility.

Shares of SPARC are trading 13% lower at ₹169.66. The stock, ahead of Wednesday's session, was up over 20% in the last one month. Shares on Sun Pharma are little changed at ₹1,665.