Bristol-Myers Squibb (BMS) has reached an agreement with Merck to end the collaborative development of the investigational oral diabetes drug Pargluva.

Under the recent termination agreement, all rights to Pargluva (muraglitazar) were returned to BMS effective Dec. 21. The agreement also returns to BMS the rights to a back-up compound to muraglitazar, the company said. The agreement follows BMS' announcement in October that it was considering ending development of the drug after determining it could take up to five years to compile additional safety data requested by the FDA.

BMS, however, said it was continuing discussions with the FDA about the drug. "We have no specific plans at the moment, but based on our FDA approvable letter in mid-October, we are in discussion with the FDA and are continuing to do what is needed to move forward," said BMS spokesperson David Rosen. "Right now we are considering a range of options including further studies and up to including stopping development."

The FDA's October approvable letter requested additional information on the drug's cardiovascular safety profile. Pargluva is a dual alpha/gamma PPAR (peroxisome proliferator-activated receptor) activator -- a new type of drug intended to regulate blood sugar while also improving fat levels in the blood.

While Pargluva and other dual-PPAR agonists have proven effective in clinical studies, many trial subjects experienced elevated fluid retention while taking the drugs, a condition that could lead to edema or potentially aggravate pre-existing heart conditions, FDA reviewers said at a September FDA advisory panel meeting on the drug.

The advisory panel, however, overwhelmingly recommended approval of Pargluva as a stand-alone therapy for Type 2 diabetes. The panel also voted in favor of approving the drug in combination with metformin, which is marketed by BMS as Glucophage and is available in generic form.

However, researchers at the Cleveland Clinic strongly disagreed with the advisory committee's decisions. Steven Nissen, a physician in the Cleveland Clinic's department of cardiovascular medicine, said if the FDA approved Pargluva, it would represent a potential public health catastrophe, according to Reuters.

Nissan said Pargluva had a risk ratio of 2.23 for the most widely accepted composite endpoint of death, myocardial infarction and stroke -- meaning the drug more than doubled patients' chances of experiencing such adverse events.