Hyperion Drops Drug After Fraud

Hyperion Therapeutics has stopped development of DiaPep277, a diabetes drug it acquired in June with the purchase of Israel’s Andromeda Biotech. It did so after learning that some Andromeda employees colluded with an outside biostatistics firm to manipulate Phase III clinical trial data. The firm has suspended the employees involved and notified regulatory authorities. Hyperion expects to take a charge against earnings of up to $55 million. Andromeda had acquired much of its intellectual property from Germany’s Evotec. Evotec, which will take its own $11 million charge, claims that Hyperion owes it $4.4 million.