Advancis falls 17% over poor test data

Stock hits new low of $1.45 as Md. drug firm faces crisis over what to do next

Key product fails again in trials

July 23, 2005|By Tricia Bishop | Tricia Bishop,SUN STAFF

Shares of Advancis Pharmaceutical Corp. sank 17 percent to a new low of $1.45 yesterday on news that its lead product candidate, an oral medicine designed to deliver drugs in time-released bursts, had again failed to achieve its goals in costly, final-stage clinical testing - this time when administered to children.

In June, a test in adults showed similar disappointing results, causing a 59 percent stock drop to $2.03. The stock peaked at $10.05 a share in January 2004.

"The obvious question is what do we do now and how do we fund our future operations," said Edward M. Rudnic, the Germantown company's chief executive officer, president and chairman, in an early-morning conference call with investors and analysts to discuss Thursday's preliminary results.

The 6-year-old biotech is awaiting final data before deciding how to proceed, but Rudnic said he will likely announce cost-cutting measures before the end of the month and could reformulate and retest the adult version of the time-release medicine as early as this fall.

Finding new, less painful ways of delivering medication is a time-honored tradition. The fictional nanny Mary Poppins suggested taking it with a spoonful of sugar, and parents have crushed their kids' pills in juice for generations. But as technology has advanced, so have the simplification methods.

Birth control producers now advertise seven-day patches that attach to the skin and replace the easily forgotten daily dose of the pill. Cough syrup makers are serving up the stuff in dissolvable strips, similar to those made by mouthwash companies. And a Montgomery County company, called FLAVORx, makes 42 flavorings - including apple, watermelon and peaches-and-cream - meant to make medication more palatable.

Advancis' goal is to cut down on the daily dosing of antibiotics using its PULSYS time-release technology, which allows a single oral dose to deliver the medication given several times daily.

"In general, most medicines don't taste good ... and most kids reject it," said Dr. Daniel Levy, an Owings Mills pediatrician and president of the Maryland chapter of the American Academy of Pediatrics. "Anything that technology can do to come up with ways of minimizing the number of doses that kids take while at the same time [maintaining effectiveness], is a blessing."

In the clinical tests, PULSYS was used to deliver the antibiotic Amoxicillin in treating strep throat and laryngitis. In children, those maladies are typically treated with penicillin administered two to three times daily for 10 days, Levy said.

Advancis tested its Amoxicillan PULSYS in children once daily for seven days and compared the results with penicillin delivered four times per day for 10 days.

85% success required

For a drug to be approved as standard treatment, the Food and Drug Administration requires an 85 percent success rate in eradicating the bacteria. Amoxicillin PULSYS achieved a 65.3 percent success rate in children, compared with 68 percent for penicillin. In the earlier adult trials, the PULSY product had a cure rate of 76 percent compared with penicillin's 88.5 percent.

"We did not achieve statistical non-inferiority, and, as plainly can be seen, were well short of the 85 percent [the FDA requires]," said Rudnic, who believes extending the dosing time to 10 days for adults may make the difference. "The questions that we have to ask ourselves over the next few weeks is can we also achieve the same thing with the pediatric paradigm as well."

Clinical testing is expensive, and thus far, much of the Amoxicillin PULSYS trials have been paid for by an outside company, Par Pharmaceutical Companies Inc. of New York, which entered an agreement to develop and test the product in June 2004.

Relationship at risk

Par has already spent $23.5 million on the project and is expected to shell out another $4.75 million this quarter. But the study results may have jeopardized the relationship.

"If the clinical trials aren't positive and there's no opportunity to develop and market the product, you would be able to conclude that the agreement [would end]," Par spokesman Stephen Mock said in an interview yesterday. His company is also awaiting more data before deciding how to proceed.

Rudnic said Advancis can always draw from its $40 million in cash along with sales of Keflex - a drug the company last year bought the U.S. rights to manufacture, market and sell - to move PULSYS forward. But Par is still holding out hope the technology, and business relationship, can be saved.

"Since we really began development of this and became aware of it, people have said `It's a great idea, it would be a great product,'" Mock said. But he said they also often add, "Can it be done?"

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