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Merck has halted clinical development for its new obesity treatment taranabant after trials showed both efficacy and side effects increased at higher doses.

The drug was due to be submitted for regulatory approval later this year, having shown weight-loss benefits in early clinical trials.

John Amatruda, senior VP and research head, diabetes and obesity at Merck Research Laboratories, said: "Available Phase III data showed that both efficacy and adverse events were dose related, with greater efficacy and more adverse events in the higher doses.

"Therefore, after careful consideration, we determined that the overall profile of taranabant does not support further development for obesity."

Taranabant was a potential blockbuster and belongs to the same cannabinoid-1 receptor class as Sanofi-Aventis' Acomplia (rimonabant). US regulators have so far refused to approve Sanofi's drug because of concerns about depression side effects.

Taranabant's failure in phase III trials is a blow for Merck's late-stage pipeline, but the pharma company said its research into obesity would continue.