BioWorld International Correspondent

DUBLIN, Ireland - Elan Corp. plc continues to rattle investor nerves, with bad news from the clinic following sharply on the heels of bad news from the boardroom.

Last week, the Dublin-based company and its partner, Cambridge, Mass.-based Biogen Inc., disclosed the failure of their anti-inflammatory drug Antegren (natalizumab) to meet the primary endpoint of a Phase III induction trial in Crohn's disease.

A total of 905 patients participated in the double-blind, placebo-controlled study. The primary endpoints were response, defined as a reduction of at least 70 points in the Crohn's Disease Activity Index at week 10, and remission, defined as a CDAI score of less than or equal to 150, also at week 10.

The companies attributed the failure to a higher than expected placebo response.

"The placebo response rate in this trial was significantly higher than the placebo rate in the [Phase II] study published in the New England Journal of Medicine, where we had a placebo response rate of 40 percent. We're now up to 50 percent," Elan President of R&D Lars Ekman said on a conference call.

Ekman told the conference call audience that the relatively high proportion of trial participants receiving drug (80 percent) as opposed to placebo (20 percent) may have contributed to the apparent placebo effect, as patients may have assumed they were more likely to be in the active dosage group. Moreover, he said, similar effects have increasingly been observed in other Crohn's disease studies. "Over the last four to five years - or actually, since Remicade - there has been a phenomenon known as the placebo creep,'" he said.

Antegren, a humanized monoclonal antibody that prevents immune cells migrating from the bloodstream into tissues such as the gastrointestinal tract or the brain, did attain statistical significance vs. placebo at week 12 of the trial, in terms of response and remission. It also attained statistical significance at week 10 among a subgroup, comprising 72 percent of the total cohort, who were shown to have active inflammation responses as indicated by the presence of the acute phase C-reactive protein. The drug candidate also attained several secondary endpoints, including a quality of life assessment based on the Inflammatory Bowel Disease Questionnaire. Elan and Biogen officials plan to meet representatives of the FDA and other regulatory authorities in order to explore the next steps they will need to take.

"It seems that they've been pretty unlucky or pretty naive with the design of the trial," David Marshall, analyst at Dublin-based NCB Stockbrokers, told BioWorld International. Part of the problem, he said, may have stemmed from the fact that patients were motivated to attain the primary endpoint, as they would then be automatically rolled over into the 12-month maintenance arm of the study, which is ongoing. "It's an unusual setup for a trial," he said. This may have arisen because the questionnaire-based CDAI includes certain subjective components. "I think that might have been creating a bit of noise in the placebo group," he said.

Despite the negative news, Marshall still sees grounds for optimism. "I'm confident that they'll get a product on the market for Crohn's on the basis of the secondary endpoints," he said. The drug appears to be well tolerated, he said, whereas Remicade, marketed by Johnson & Johnson subsidiary Centocor Inc., of Malvern, Pa., has more severe side effects. However, Marshall said he has pushed out revenue expectations for the product in this indication by at least one year, and this delay is likely to both lengthen the time Elan will need to become cash-flow positive again and to reduce its options for raising additional finance.

Antegren is concurrently undergoing two Phase III trials in multiple sclerosis, which are assessing its efficacy as a monotherapy and in combination with Biogen's Avonex, respectively. "In both these studies, enrollment is complete and dosing is ongoing," Biogen's executive vice president of R&D, Burt Adelman, told the conference call. "The MS program is on track and moving along well."

Elan Corp. plc's share price fell by 21 percent over the course of the week to close at US$5.99.

Earlier this month, the company said it had still not resolved all of the issues with the SEC regarding the historic treatment of its off-balance-sheet entity Elan Pharmaceutical Investments III Ltd. and a related transaction. The resulting delay in filing its 2002 Form 20-F could place it in technical default with respect to certain bondholders and accelerate its debt repayment obligations. "That's pretty separate. They should be able to sort that out," Marshall said.