U.S. Markets closed

Vanda's eczema drug fails mid-stage study, shares fall

(Adds detail, updates shares)

March 4 (Reuters) - Vanda Pharmaceuticals Inc said its experimental atopic dermatitis drug failed a mid-stage study to treat chronic itching.

Atopic dermatitis or eczema is a chronic skin rash or inflammation that often appears in infancy. It affects between 9 and 30 percent of the U.S. population, according to the National Institutes of Health. The cause of the disease is unknown.

The study data showed no statistical difference between patients on the drug, tradipitant, and those on a placebo, due to a "very high placebo effect", the company said on Wednesday.

However, a subsequent analysis showed that patients with higher levels of tradipitant exposure at the time of assessment had clinically meaningful responses to the drug, Vanda said, adding that additional studies may be needed to confirm the findings.

Vanda licensed tradipitant from Eli Lilly and Co in 2012.

Vanda has two other drugs approved for use in the United States. The company regained the U.S. and Canada rights for its schizophrenia drug Fanapt from Novartis AG late last year.

Vanda also markets Hetlioz, which is used to regulate the internal body clocks of blind patients and help normalize sleep patterns.

Vanda's shares, which closed at $11.06 on the Nasdaq, were down nearly 6 percent in after-hours trading.

(Reporting by Natalie Grover in Bengaluru; Editing by Simon Jennings)