Shares of Genentech Inc. and Biogen Idec Inc. sagged on Tuesday after the companies said their jointly marketed drug Rituxan failed to show effectiveness in fighting lupus erythematosus, commonly called lupus.

Lupus is a chronic autoimmune disease that can be fatal, characterized by inflammation of the joints, skin, major organs and central nervous system as the immune system attacks healthy tissues and cells.

An estimated 250,000 to 500,000 Americans, most of them young women, have systemic lupus erythematosus, the severe form of the disease Rituxan was tested against. Some form of the disease affects more than 1.5 million Americans, according to the Lupus Foundation of America, a patient advocacy group.

Rituxan, known generically as rituximab, was approved to treat non-Hodgkin’s lymphoma in 1997 and rheumatoid arthritis in 2006 and had sales last year of $2.3 billion in the U.S. alone.

The trial for lupus included 257 patients and lasted 52 weeks. According to the companies, the drug performed no better than a placebo against lupus.

“We are disappointed in the results. But we understood from the outset the significant challenges in developing treatments for systemic lupus erythematosus,” Hal Barron, Genentech’s Chief Medical Officer said in a statement, as quoted by the Wall Street Journal.

Following the trial’s negative results, shares of Genentech fell 7.2%, or $5.23, to $67.93 in 4 p.m. trading on the New York Stock Exchange. Biogen's shares fell $3.34, or 5.2%, to $61.33 in 4 p.m. trading on the Nasdaq Stock Market.

Genentech, based in California and Biogen, based in Massachussetts are developing separate large-stage clinical trials testing Rituxan as a treatment for lupus nephritis, an inflammation of the kidneys. It results are expected in the first quarter of 2009.

Genentech is also developing next-generation lupus drugs that share chemical properties with Rituxan.

The results of the trial also hurt shares of Human Genome Sciences Inc., which is pursuing a lupus treatment thought to work similarly to Rituxan. The results are expected the next year, but Human’s shares fell 4 percent or 27 cents to $6.52 in 4 p.m. trading on the Nasdaq Stock Market.