Sweetener has promise for diabetics Researcher says product doesn't raise blood sugar levels

Maker is Biospherics

Company can't afford clinical tests for FDA approval, official says

June 10, 1996|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

Biospherics Inc. of Beltsville has new evidence that its research-stage sugar substitute may also be a leading edge treatment for the most common form of diabetes, a researcher from the University of Maryland told an American Diabetes Association conference in San Francisco yesterday.

The evidence is a small study based at the University of Maryland Medical Center in Baltimore, the first human study aimed at discov- ering whether Biospherics' sugar substitute -- D-tagatose -- may also control the negative effects that diabetics experience from eating many carbohydrates and complex sugars that remain even on diabetes-restricted diets.

A study of 12 subjects by endocrinologists Dr. John Wilber and Dr. Thomas Donner indicated that D-tagatose had no effect on insulin and blood sugar levels in nondiabetics -- an important step in demonstrating that the product is safe enough to become a legal food additive in the United States.

Diabetics in the group actually saw a key blood-sugar measurement fall, cutting the gap between the diabetes patients' measurements and those of healthy patients about a third, Wilber said.

"It sounds like a little change, but it's not," Wilber said. "The tighter your metabolic control, the better off you are going to be."

The next phase of the Biospherics-UMAB study, which is funded by Biospherics and by a two-year $110,430 grant from the state's Maryland Industrial Partnerships program, will study the effects of D-tagatose over a longer period than eight weeks. The researchers hope that longer exposure will cut blood sugar even more.

Wilber said that even diabetes patients who follow their diets experience long-term problems caused by the fluctuations in their blood sugar. These problems stem from the combination of their disease and their consumption of carbohydrates, and can include blindness, impotence and premature death.

The researchers believe D-tagatose, which previously has been used only in animal studies, may someday become a supplement to diabetes treatments that focus on regulating the level of insulin in the body, as well as other emerging drug therapies that are intended to control blood sugar more directly.

"It's not a complete reversal of diabetes," Wilber said. "We haven't solved the problem. But the magnitude of the improvements are similar to what we see with other [treatments]."

Despite the encouraging research, it is unlikely that D-tagatose will bring major prosperity to Biospherics any time soon.

The 29-year-old company has been developing the sugar, which is found in a byproduct of cheese called whey, since the late 1980s. But the company remains short of cash to fund research and production, Biospherics Chief Executive Gilbert Levin said.

Biospherics also is far from receiving U.S. Food and Drug Administration approval to market D-tagatose in this country as either a sugar substitute or a drug.

The stock market has been slow to heed Levin's cautions in the past. In September, Bio-spherics stock roared from about $3.28 to about $13 in a week, after adjusting the price for a 2-for-1 stock split that took effect last month.

That rally was prompted by news that Biospherics had reached a deal with a Danish food company to begin manufacturing D-tagatose for the Asian and Australian sweetener markets, which have lower regulatory barriers than the United States.

Three months earlier, Bio-spherics had also announced a U.S. patent on the use of D-tagatose to treat diabetes.

After a spectacular one-day collapse in Biospherics' stock, which fell 40 percent after The Sun and CNBC published skeptical stories, the shares have held on to most of the value they gained during the rally. The stock closed Friday at $9.125, and trades at about 182 times the company's per-share earnings.

In a move that Wall Street typically sees as a sign that company insiders believe a stock is overpriced, Levin and his wife Karen have been selling Biospherics shares in recent months. But they remain by far the largest stockholders, owning about 3.5 million of the company's 7.8 million shares.

The company makes a modest profit from its information services division, which provides telecommunications and database management services. Last year, it earned $400,000 on $13.7 million in sales.

Levin said the company plans to put D-tagatose on the Asian market as soon as its Danish partner can begin manufacturing commercial quantities of the sweetener. But he said the company doesn't have the $6 million it would take to conduct detailed cancer studies in animals that the United States requires before the sweetener can be approved.

Biospherics hopes to get D-tagatose on the U.S. market either by using profits from Asia to pay for the cancer studies -- Levin said it could take two years before they are ready for FDA review -- or by proving that the substance is so common in natural foods that it is already "generally recognized as safe."

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