PDL BioPharma Inc. is anticipating further discussions with the FDA following a Phase III miss of its vasoactive peptide, terlipressin, in patients with Type I hepatorenal syndrome.

Though the top-line results indicated a positive trend, they failed to show statistical significance in kidney function and survival against Type I HRS, a potentially fatal complication arising from advanced liver disease.

The data will be further analyzed, and PDL and partner, Orphan Therapeutics LLC, expect subsequent discussions with the FDA before deciding on a course of action.

Until then, "we cannot determine what further steps will be required to move the program forward," Steven Benner, chief medical officer of PDL, said during a conference call, "or whether PDL will elect to move forward."

Either way, he added, "we believe that any potential registrational effort is significantly delayed."

The Fremont, Calif.-based firm inherited U.S. and Canadian rights to terlipressin as part of its 2005 acquisition of Edison, N.J.-based ESP Pharma Inc. In that deal, valued at $475 million, PDL touted the addition of a 75-person sales force, ESP's marketed products and a foray into the cardiovascular field with approved hypertension drug, Cardene I.V. (See BioWorld Today, Jan. 26, 2005.)

Terlipressin, which ESP had licensed from Orphan in mid-2004 in exchange for undisclosed up-front, milestone and royalty payments, was not considered a critical addition to PDL's pipeline at the time of the acquisition, and Wall Street had virtually no reaction to the Phase III miss. Shares of PDL (NASDAQ:PDLI) closed at $17.44 Friday, up 21 cents, although trading was heavier than normal.

The trial, conducted by Orphan, randomized 112 patients with Type I HRS to receive terlipressin or placebo every six hours until either a reversal of HRS was noted or the end of the 14-day treatment period.

The primary endpoint was defined as treatment success, as measured by the percentage of patients alive at Day 14 who demonstrated reversal of HRS based on two measurements of serum creatinine levels less than or equal to 1.5 mg/dL without dialysis or disease recurrence.

Despite the disappointing results, PDL CEO Mark McDade said the company remains "confident in our two late-stage programs, Nuvion and Ularitide," and continues to make strides in its early stage pipeline.

Nuvion (visilizumab), a monoclonal antibody designed to bind to CD3, is in a Phase II/III trial in patients with intravenous steroid-resistant ulcerative colitis and in Phase II studies in Crohn's disease. Ularitide is a synthetic form of urodilatin, in Phase II development in acute decompensated heart failure.

PDL holds worldwide rights to both those products.

Through collaborations, PDL is working with Cambridge, Mass.-based Biogen Idec Inc. on volociximab, an anti-angiogenic compound, in solid tumors. The company also has a partnership with F. Hoffmann-La Roche Ltd., of Basel, Switzerland, to develop Zenapax (daclizumab) in multiple indications such as multiple sclerosis, asthma and organ transplant rejection.

The company also released its second-quarter earnings last week, posting a GAAP net loss of $6.1 million, or 5 cents per share. Non-GAAP net income, which excluded certain items, came in at $21 million, or 17 cents per share.

Revenues increased by 29 percent to $104.3 million - the first quarter PDL has broken the $100 million mark - driven in part by sales of Cardene I.V. (nicardipine hydrochloride), a calcium channel blocker, which jumped 47 percent to $24.4 million. Cardene I.V. is indicated for hypertensive patients not able to receive oral therapy.

PDL also saw an increase in royalty revenues from growing sales of South San Francisco-based Genentech's blockbuster cancer drugs Avastin (bevacizumab) and Herceptin (trastuzumab).

As of June 30, PDL had cash, cash equivalents and marketable securities totaling $414.3 million.