Washington Editor

Xcyte Therapies Inc. withdrew its pivotal trial plans previously submitted to the FDA, causing a 17.5 percent stock drop.

The protocol related to a planned Phase II/III trial of Xcellerated T Cells in chronic lymphocytic leukemia. The Seattle-based company's product stems from its Xcellerate Technology, which it uses to generate activated T cells - Xcellerated T Cells - from a patient's blood. After stimulating them to carry out immune functions, the Xcellerated T Cells then are administered to the patient.

But there has been a glitch.

The agency requested the withdrawal to allow additional discussion of the study's design. The company did not elaborate on design issues of concern to the FDA, but said it would resubmit the protocol as a draft. As a result of those actions and additional discussions, Xcyte now expects the trial to start some time after the next quarter.

"We have been working closely with the FDA on the design of this trial since our end-of-Phase II meeting in September 2004," Xcyte President and CEO Ron Berenson said. "We intend to work diligently with the FDA to resolve the remaining issues as quickly as possible."

The company is scheduled to meet with the FDA in the middle of this month to discuss the chemistry, manufacturing and controls submission related to the trial, as well as the planned transfer of its manufacturing operations to a newly completed facility in Bothell, Wash.

Phase I/II data reported at December's American Society of Hematology meeting in San Diego showed that the use of Xcellerated T Cells resulted in a 50 percent or greater decrease in the size of enlarged lymph nodes in 12 of 17 patients with chronic lymphocytic leukemia. Also, 11 of 13 patients with an enlarged spleen demonstrated a 50 percent or greater reduction in spleen size, but decreases in leukemic cell counts in the blood were not observed.

In addition to its Xcellerated T Cell development for chronic lymphocytic leukemia, Xcyte also has evaluated their use in patients with multiple myeloma, non-Hodgkin's lymphoma and AIDS.

Almost a year ago, Xcyte priced a $33.6 million initial public offering, selling 4.2 million shares at $8 apiece. It had $27.2 million in cash, cash equivalents and short-term investments as of Sept. 30. It posted a $6.8 million net loss in the third quarter.

On Thursday, Xcyte's shares (NASDAQ:XCYT) fell 40 cents to close at $1.89.