Advancis Pharmaceutical Corp. is giving Amoxicillin Pulsys another chance.

After the product, which combines the antibiotic amoxicillin with the company's once-a-day controlled-release Pulsys technology, missed in two pivotal trials earlier this year - and prompted a staff reduction and a dropped partnership - Advancis has rebounded with plans for another Phase III trial.

The new study, expected to begin in November, would again evaluate the product on a non-inferiority basis compared to penicillin in adults and adolescents with pharyngitis/tonsillitis due to Group A streptococcal infections.

"In terms of structure, nothing has changed," said Bob Bannon, director of investor relations for the Germantown, Md.-based company. "It's the same formulation and the same daily dosing of 775 mg of Amoxicillin Pulsys. We're just extending the treatment period from seven to 10 days."

That alteration encouraged Wall Street. Shares of Advancis (NASDAQ:AVNC) rose $1 Thursday, or 95.2 percent, to close at $2.05.

Treatment in the comparator arm will remain the same as previous trials, with those patients receiving 250 mg of penicillin four times per day for 10 days. In addition to showing non-inferiority, Advancis' product also must meet the FDA's requirement of 85 percent bacterial eradication in order to gain marketing approval. The previous Phase III trial in adolescents and adults showed a 77 percent bacterial eradication in the Amoxicillin Pulsys treatment arm. (See BioWorld Today, June 17, 2005.)

Since the first disappointing results were reported in mid-June, Advancis has been analyzing the data, looking mostly at the product's minimum inhibitory concentration time, which Bannon described as the "pharmacokinetic measurement most predictive of an effective therapy."

Administered for a seven-day treatment period, Amoxicillin Pulsys was found to be more than the minimum threshold about 50 percent of the time. Analysis suggested that adding three extra days of treatment could boost those levels between 60 percent and 70 percent, Bannon told BioWorld Today, and "that's what has given us the confidence with our plan to extend the therapy."

Trimming its sails, Advancis is selling off U.S. rights to its Keflex brand of cephalexin, acquired for $11 million last year from Indianapolis-based Eli Lilly and Co., and refocusing its resources to fund the new Amoxicillin Pulsys trial.

The company reached an agreement to sell the Keflex rights to an undisclosed private company, in exchange for $12 million to be received in 2005, including an up-front, non-refundable fee of $1 million. Advancis also could receive an additional $3 million in milestone payments for products under development to expand the Keflex franchise, plus royalties.

When it first acquired Keflex, Advancis had planned on creating a Pulsys-based formulation of the cephalexin antibiotic. Bannon said that project is "still on the table," though the company won't be spending any research and development funds on that until it sees positive results from the amoxicillin trial.

The sale is expected to close next quarter, pending the completion of a financing by the buying company.

Funds from that transaction, in addition to the $40 million in cash and marketable securities at the end of the second quarter will provide Advancis with "enough capital to complete our expected clinical trial and fund operations into 2007," Advancis CEO Edward Rudnic said during a conference call, adding that the "recent work force reduction, although painful, will help us to preserve cash and add flexibility to our business plan."

The company cut 33 jobs in late July, including six executive positions, in a move expected to result in an annual savings of about $4.1 million. (See BioWorld Today, Aug. 1, 2005.)

"We're aware that it's very unlikely that we'll get another chance to prove the value of Pulsys dosing," Rudnic said, "and we view this opportunity of a new pivotal trial of Amoxicillin Pulsys as critical."

The trial is expected to enroll about 600 patients and will take an estimated six to eight months to complete. If everything proceeds on schedule, the company should be able to report data around the middle of next year.

At this time, Advancis is not looking for a development partner. Its former collaborator, Spring Valley, N.Y.-based Par Pharmaceutical Corp., which had funded the earlier Phase III trials and planned to help with sales and marketing, terminated its agreement last month, canceling the final $4.75 million that would have been paid to Advancis in the fourth quarter. (See BioWorld Today, Aug. 6, 2005.)

But, while it has enough money, "I think we would certainly be open to potential partnerships" for commercialization, Bannon said.

Nearly 55 million prescriptions for amoxicillin were written in 2004, for total sales of $600 million. Advancis believes its more convenient Pulsys dosing could take a significant chunk of that market. Of the overall amoxicillin prescriptions, about one-fourth is for treating pharyngitis and tonsillitis, and generic prescriptions usually run from $10 to $12.

Advancis expects the pricing on Amoxicillin Pulsys to be a "modest premium" over generics, costing somewhere around the $20 mark, Bannon said. If the company gains approval to treat adolescents and adults, the product could pull in estimated revenues of $150 million, and that figure would double if the product is found to be successful in pediatric patients as well. Whether the company will pursue a pediatric indication depends on the outcome of the trial in adolescents and adults.

The company reported disappointing results in July from its Phase III pediatric trial of Amoxicillin Pulsys, which was administered in a "sprinkle" formulation with food. Data from that study reported bacterial eradication levels even lower than the adult trial at 68 percent. (See BioWorld Today, July 25, 2005.)

If the company is able to add pediatric patients, and add additional indications, such as otitis media, bronchitis and sinusitis, sales of Amoxicillin Pulsys could end up exceeding $1 billion.

Following the Keflex sale, Advancis expects its total revenue for 2005 to be between $16 million and $18 million, with an expected net loss for the year to range between $30 million and $35 million, or $1.10 to $1.30 per share. The company anticipates ending the year with a cash balance of around $35 million to $38 million.