BioWorld International Correspondent

LONDON - Shares in Pharmagene plc dropped by one-quarter when the company announced its lead product, PGN0052, failed in a Phase IIa trial in cystic fibrosis and the company warned that 2004 revenues from its drug discovery services would be lower than 2003.

PGN0052 is a synthetic version of secretin, a hormone that stimulates the flow of ions and water from epithelial cells and the relaxation of airways. Pharmagene's preclinical data indicated the mechanism of action was independent of CFTR, a protein involved in transporting ions and water across cell membranes that is defective in cystic fibrosis sufferers.

The Phase IIa proof-of-concept study in 18 cystic fibrosis patients was designed to see if PGN0052 would improve the ability of the lungs to clear secretions, but no significant improvement was seen.

The setback delays Pharmagene from moving beyond its human tissue-based drug discovery services to applying the technology to develop its own pipeline. Shares in the company (LSE:PGN) dropped 10 pence to close at 31 pence on the news.

Royston-based Pharmagene plans to continue developing PGN0052 in respiratory diseases. Alistair Riddell, CEO, said that despite the preclinical findings, the Phase IIa results demonstrate that secretin is dependent on the CFTR protein for full activity.

"The CFTR protein in asthmatic and chronic obstructive pulmonary disease patients is normal and the potential for secretin to mediate airways rehydration, combined with its airways-relaxation effects, both of which were Pharmagene discoveries, will be further evaluated," he said.

However, further trials will have to await the development of a PEGylated version of PGN0052 by Pharmagene's partner, Enzon Pharmaceuticals Inc., of Bridgewater, N.J., under a deal signed in September 2004.

Enzon is engineering several PEGylated forms of PGN0052 in a bid to extend the duration of action and has an option to undertake co-development of the product.

Pharmagene's second product, R1, for irritable bowel syndrome, will start Phase I early in 2005, while R4 for migraine is due to enter the clinic in the second half of the year.