Washington Editor

F. Hoffmann-La Roche Ltd. placed a hold on the development program for MAXY-alpha, a PEGylated interferon-alpha that was in early human studies for treating hepatitis C and hepatitis B virus infections.

Redwood City, Calif.-based Maxygen Inc. licensed the molecule to Roche under a 2003 agreement. Shares of Maxygen (NASDAQ:MAXY) fell 77 cents Friday, or 9.3 percent, to close at $7.47.

Roche imposed the hold after results of a preliminary analysis of Phase Ia study data showed there were lower drug levels in serum than expected, Maxygen spokeswoman Michele Boudreau told BioWorld Today. The data also showed a reduction in the expression of the interferon biomarker, she added.

Antibodies binding to MAXY-alpha were identified in some study participants. However, Boudreau said, it is uncertain if that was the cause of the reduction in expected drug levels or the reduced interferon biomarker expression.

Basel, Switzerland-based Roche, she said, has initiated additional investigational studies to assess the preliminary study results.

The Phase Ia trial, now on hold, was being conducted in New Zealand in an undisclosed number of healthy volunteers to evaluate safety, tolerability, pharmacokinetics and pharmacodynamics of Maxy-alpha, also known as R7025.

The study was a double-blind, dose-escalation, controlled study comparing a single subcutaneous administration of Maxy-alpha with both placebo and Roche's Pegasys (peginterferon alfa-2a).

Investigators found no problems in analysis of data after study participants received the first round of injections, Boudreau said. But concerns were raised about the data after study participants received the second injection of the compound, she said.

Maxy-alpha was created through the use of Maxygen's MolecularBreeding directed molecular evolution technologies. The product has been designed to have more antiviral activity against the hepatitis C virus and be more effective in stimulating immune responses to help combat the infection.

Preclinical data comparing Maxy-alpha to Pegasys demonstrated that Maxy-alpha had increased antiviral and immune-stimulatory activity compared to Pegasys, according to Maxygen.

Under the terms of the 2003 agreement with Roche, Maxygen was eligible to receive milestone payments and royalties in exchange for worldwide rights to Maxy-alpha. To date, Maxygen has received $11 million in milestone payments, Boudreau said.

The financial impact of the development hold for now will have no impact on Maxygen's revenues, Boudreau said. However, the company would be impacted by the loss of royalties if the product fails to make it to the marketplace, she acknowledged.

The firm's most advanced product, MAXY-G34, a next-generation granulocyte-colony stimulating factor, is in Phase II clinical trials at multiple sites in Eastern Europe in cancer patients with chemotherapy-induced neutropenia.

Results of a Phase I trial showed that MAXY-G34 exhibited a median half-life approximately 2.3 times that of Amgen Inc.'s Neulasta (pegfilgrastim), Maxygen said.

Thousand Oaks-based Amgen's Neulasta has dominated the market for products to treat neutropenia, a severe decrease in neutrophil cell counts in the blood. Neutrophils are a specific type of blood cell that play an important role in the defense against bacterial infection. Neutropenia is a common side effect of chemotherapy.

Boudreau said her firm is "excited" about its potential competition against Amgen in the neutropenia therapy market, which is estimated to be about $4 billion annually.

Maxygen's Factor VII product for the treatment of hemophilia, MAXY-VII, is expected to enter clinical trials next year.

Roche backed out of its development and commercialization deal with Maxygen on the hemophilia product in March. Roche indicated that it was terminating the agreement based on the inability of the parties to establish an animal model intended to provide preclinical de-risking of the program. (See BioWorld Today, March 25, 2007.)