Stock values continued to soar all last week for IntraBiotics Pharmaceuticals Inc. on two news items related to its lead product, iseganan hydrochloride, the latest of which outlined a special protocol assessment agreement with the FDA.

The agency detailed a procedure for eventual registration of the oral rinse product through a pair of identical pivotal trials designed to evaluate iseganan's ability to prevent ventilator-associated pneumonia. On Friday, the Palo Alto, Calif.-based company said it plans to begin enrollment by the end of this month in the first of the two double-blind, multinational studies.

"We're pleased to have the FDA focused on our program with their support and collaboration," IntraBiotics President and CEO Henry Fuchs told BioWorld Today. "We definitely have a lot of hard work ahead of us to enroll a trial and get the data. We're excited it will work, but that's a bit in the future."

IntraBiotics' shares on Friday gained 9.4 percent, or $1.20, to $14. In just more than two weeks, the stock (NASDAQ:IBPI) nearly quadrupled in value. The shares closed at $3.70 on Sept. 4 and more than doubled to close at $7.80 a day later. The 111 percent spike followed news of fast-track status from the FDA for iseganan, a broad-spectrum antimicrobial peptide.

"We're a company that essentially has a Phase III story with a very low market cap, largely due to its history," Fuchs said, noting iseganan's prior failure in treating another indication. "But as with many companies, the first bite at the apple doesn't necessarily work, and it's hard for Wall Street to be supportive all the time for everything. But then there's a comeback as people take a second look and realize there is more than one indication."

The company expects to complete the first trial and report its findings by the end of next year. Given positive results at the end of both studies, IntraBiotics would plan to file a new drug application.

But the company said it would need to raise more capital in order to complete both trials. IntraBiotics reported $11.9 million in cash, cash equivalents and short-term investments as of June 30.

Each study will enroll about 900 mechanically ventilated patients who will be randomized to receive iseganan or placebo six times a day for up to two weeks. The trials are designed to evaluate the drug's safety and efficacy in reducing the incidence of pneumonia in mechanical ventilation patients.

"We have sufficient capital to get started, and that's what we're focused on now that we have clearance from the FDA," said Fuchs, adding that the company's burn rate is such that it has capital for close to four more quarters. "And that's controllable according to the rate at which we enroll the studies."

With full worldwide rights to iseganan, IntraBiotics could pursue opportunities to partner the product down the road. But Fuchs said the company primarily would focus on the studies while keeping a watch on strategic and financial options.

IntraBiotics pared its losses and R&D expenditures over the past year as it slashed its programs and staff following a failed Phase III study of iseganan for oral mucositis. When the missed results were first reported, the company's stock dropped 70 percent to close at 46 cents (the stock was at 22 cents April 10, and $2.49 April 11, after a 1-for-12 split). Two weeks later, it laid off 70 percent of its then 37-employee work force. (See BioWorld Today, Oct. 1, 2002, and Oct. 15, 2002.)

"It's the rule, not the exception, that companies have a glitch," Fuchs said. "But then they're able to come back through perseverance and thoughtful insight by their investors."

Early this year, IntraBiotics said it was pinning its hopes on the late-stage pneumonia program. The company said that though there was a question relative to whether oral mucositis was infectious and could be treated with an anti-infective such as iseganan, no such doubts exist for pneumonia. (See BioWorld Today, Feb. 10, 2003.)

"Pneumonia is 100 percent infectious," Fuchs said, noting the condition's preventability. "There have been more than 30 controlled clinical trials of antibiotics in the oral cavity to prevent the aspiration of bacterial-laden saliva, which is responsible for pneumonia. So that strength of evidence is very high in demonstrating the proof of principle that pneumonia in artificially ventilated patients occurs because of the aspiration of bacterial-laden saliva."

IntraBiotics' nine remaining employees remain optimistic that the upcoming studies will prove that iseganan can disrupt that pathway to disease. The drug can eliminate Gram-negative and Gram-positive pathogens that cause pneumonia without causing resistance, Fuchs said.

The company also is studying iseganan's ability to treat cystic fibrosis in a Phase I program, as well as other antimicrobial agents in various preclinical research stages.