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GlaxoSmithKline (NYSE:GSK) and Adolor (ADLR) said Entereg, their drug under investigation for opioid-induced constipation, was found to cause cardiovascular and neoplasm side effects.

Initially, GSK and Adolor reported an increase in CV adverse events that was not statistically significant. But subsequent analysis showed seven myocardial infarctions in the active drug cohort. Also, 15 neoplasms (benign, malignant, skin cancers and unspecified, including polyps) were found in the active drug arm, against 2 in the placebo group. Four of the 15 were termed serious.

The active drug group also experienced an increase in bone fractures. The drug was scheduled to start another Phase III trial, but its developers have withdrawn their application for the trial and stopped a continuation of the previous test. The news sent Adolor 59% lower; it dropped $5.12 to $3.60.

ImClone (IMCL) and Bristol-Myers Squibb (NYSE:BMY) reported that Erbitux was not effective against pancreatic cancer. Erbitux was given together with Gemzar from Lilly (NYSE:LLY) to patients who had unresectable or metastatic pancreatic cancer, but the addition of Erbitux did not extend overall survival. Erbitux remains in a pancreatic cancer pilot study in which it is being given in addition to Gemzar and Avastin from Genentech (DNA). ImClone fell $2.71 to $39.64, a 6.4% slide.

Ortho-McNeil, a division of Johnson & Johnson (NYSE:JNJ), recalled all the bottled versions of a drug called Grifulvin after glass fragments were found in two bottles. Grifulvin is a liquid drug used for ringworm and other fungal infections. Customers who have bought the drug can ask to have their money refunded.

Inhibitex (NASDAQ:INHX) will pay $19 million to acquire FermaVir Pharma (OTC:FMVR) in an all-stock transaction. FermaVir is developing antivirals, including a treatment for herpes zoster (shingles) that will begin a Phase I trial in Q3 of 2007. It also has a number of compounds in pre-clinical development for human cytomegalovirus [CMV] disease. Each of the 20.8 million shares of FermaVir will be exchanged for .55 shares of Inhibitex, giving FermaVir shareholders a 27% share in the resulting company. Inhibitex slipped $.006 to $1.654, but FermaVir dropped 27 cents (17%) to $1.33.

Orexigen Therapeutics (NASDAQ:OREX) set terms for its pending IPO. The company will offer 6 million shares in an $11-$13 range. Orexigen is developing drugs for central nervous system disorders, including two obesity drugs in clinical trials. Contrave, which targets steady weight loss, is in a Phase III trial. In its Phase IIa trial, Empatic, which is designed for a more dramatic decrease in weight, produced an average 9.2% weight loss over 24 weeks and a 12% decrease in 48 weeks. At $12 per share, Orexigen would have a market capitalization of just under $300 million.

Renovis (RNVS) will extend its drug development research agreement with Pfizer (NYSE:PFE) for another year. The two companies are investigating VR1 antagonists, a class of compounds that affect cell signaling. The expected uses for Renovis’ drugs are pain and urinary incontinence. Renovis and Pfizer will begin clinical testing of the first compound this year. Renovis gained 15 cents to end at $4.12.

Biotech slipped lower in the session today. The AMEX Biotech Index was lower by .67%, but the S&P 500 gained .26% and Nasdaq was higher by .34%.

Disclosure: Centient management holds a position in Genentech shares and does consulting work for Genentech.

Source: Biotech Day In Review: Entereg from GSK and Adolor Fails Test