UPDATE 1-NexMed, Novartis end anti-fungal drug development

* NexMed says data insufficient for marketing approval

* NexMed Shares fall 43 pct in after-market trade

July 7 (Reuters) - NexMed Inc (NEXM.O) and Novartis AG (NOVN.VX) (NVS.N) are terminating the development of an anti-fungal drug to treat a nail infection, sending NexMed's shares down 43 percent in after-market trade.

NexMed said the results from two late-stage studies were insufficient to support filing for a marketing approval. In Sept 2005, NexMed entered into an agreement with Novartis, under which Novartis assumed all clinical development, regulatory, manufacturing and commercialization responsibilities for the drug, NM100060, a topically applied treatment of onychomycosis.

Shares of NexMed were down 22 cents at 20 cents in trading before the bell. The shares closed at 42 cents Tuesday on Nasdaq.

For the alerts double-click [ID:nWNAB5050] . (Reporting by Anand Basu in Bangalore; Editing by Anil D'Silva)