Merck & Co’s anti-obesity drug taranabant has been scrapped due to side effects uncovered during clinical trials said the company. According to a statement from the company the drug worked in helping people lose weight but it was also associated with an increased risk of psychiatric events.

The halting of the trials on the drug taranabant, represents a major setback for Merck as it is already facing pressure with slowing sales of some it’s best selling drugs and also has the threat of generic drugs posing competition for them. 

Merck said that the effectiveness of taranabant as well as the side effects are dependent on dosage, with higher dosage eliciting greater weight loss but more side effects as well. The company said they were not able to find a dosage that helped people lose weight while keeping the risks of side effects to a minimum. Company spokeswoman Amy Rose said they were halting the five patient study of the drug. 

An article in the Wall Street Journal said, "The Company said Thursday that both effectiveness and side effects are dependent on dose levels, with higher doses producing greater effectiveness but more adverse events. Essentially, Merck wasn't able to find a dose level that adequately minimizes risk while helping people lose weight to a significant degree."

The drug taranabant, is a chemical that blocks a receptor in the brain. This receptor is activated by THC, which is the same ingredient found in marijuana and is widely distributed in the brain. Presumed to be involved in a variety of brain processes this receptor is also found in some other tissues of the body including fat cells and the adrenal, thyroid and pituitary glands which makes the presence of side effects not surprising. 

A drug on similar lines Acomplia, generically known as rimonabant, developed by France's Sanofi-Aventis SA had met with resistance from the U.S. Food and Drug Administration in getting approval and an FDA advisory committee recommended against approving it 2007 because of psychiatric side effects which resulted in Sanofi subsequently withdrawing its application. Merck's experimental cholesterol drug had met a similar fate earlier this year while sales for their top product Gardasil, a cervical-cancer vaccine have slowed down considerably. Some of their other popular products are expected to lose patent protection in coming years.

Merck shares are off more than 40 % to date and Deutsche Bank analyst Barbara Ryan said the taranabant news could further pressure them lower.