IntraBiotics Pharmaceuticals Inc. stopped development of iseganan for mucositis following a Phase III failure.

The company said late Friday that preliminary results of the 509-patient Phase III trial of iseganan hydrochloride oral solution in reducing the incidence and severity of ulcerative oral mucositis in patients undergoing high-dose chemotherapy showed the trial did not meet its primary endpoint. IntraBiotics' stock (NASDAQ:IBPI) lost $1.11 Monday, or 70.7 percent, to close at 46 cents.

Although secondary endpoints showed positive trends, they did not reach statistical significance, either, prompting IntraBiotics' senior vice president and chief financial officer, Eric Bjerkholt, to tell BioWorld Today the company is "abandoning our attempt to develop iseganan for all mucositis indications."

"Iseganan appears to have a positive impact, but it's not statistically significant," he said. "We will now take some time and assess our strategic options and once we have something definitive to communicate, we'll let investors know."

The study measured the proportion of patients given iseganan who did not develop severe oral mucositis during chemotherapy vs. the placebo arm. Preliminary results showed 43 percent of patients in the iseganan arm did not develop mucositis, while 37 percent of placebo patients also were free of severe oral mucositis (p=0.18). The secondary endpoints were reduction of pain, swallowing difficulty, the proportion of patients who developed ulcerative oral mucositis, narcotic use and the severity of oral mucositis during chemotherapy.

The failed trial puts IntraBiotics in a clinically dire position. In June 2001, the company, well ahead of biotechnology's current restructuring trend, cut 70 percent of its employees, consolidated its facilities and ended certain collaborations in order to save about $7 million to $8 million per quarter. That move was done to allow IntraBiotics the financial resources to get iseganan to market.

Iseganan - formerly called Protegrin IB-367 Rinse - is from a class of peptides known as protegrins. They are naturally occurring in mammals and are part of the first line of defense against invading bacteria and fungi.

But the product itself has had its shares of difficulties. IntraBiotics' restructuring came about a month after iseganan failed to prevent mucositis in a Phase III trial in patients undergoing high-dose chemotherapy. However, that failure was unusual because a third-party vender-dosing error invalidated data on 102 patients. IntraBiotics moved ahead, running a Phase III trial of the product in patients undergoing radiotherapy. In May, preliminary results from the radiotherapy trial showed iseganan did not stack up well against placebo in both primary and secondary endpoints. The news dropped IntraBiotics' stock $2.71, or nearly 70 percent. (See BioWorld Today, April 27, 2001, and May 7, 2002.)

But by then, IntraBiotics had initiated the most recent Phase III trial of iseganan in chemotherapy patients to make up for the one spoiled by the vendor error. It loomed as the company's last chance, at least in the near term, to get the product to market in the mucositis indication. And IntraBiotics had been developing ramoplanin oral powder for the prevention of vancomycin-resistant enterococci bloodstream infections in collaboration with Biosearch Italia SpA, of Gerenzano, Italy, but Biosearch reclaimed the rights to the product in 2001 and has since licensed them out to Genome Therapeutics Corp., of Waltham, Mass. (See BioWorld Today, Oct. 10, 2001.)

IntraBiotics does have iseganan in Phase II development for the prevention of ventilator-associated pneumonia (VAP) and in Phase I work for the treatment of respiratory infections in cystic fibrosis patients. There also are preclinical programs, but with the poor results released Friday, IntraBiotics will have to make adjustments.

"One option is to pursue [iseganan in VAP] now with our remaining cash, but that's not the only option," Bjerkholt said. "So we need to take some time and reflect before we communicate what we will do."

As of June 30, IntraBiotics, of Mountain View, Calif., had about $43 million in cash, cash equivalents and restricted cash. It had a net loss of about $8 million in the second quarter. It used 37.1 million shares to figure its second-quarter net loss per share.

Bjerkholt said the company hopes to provide full data from the trial at a scientific conference "in the near future." For now, however, it will step back and examine things.

"It's definitely a setback," Bjerkholt said. "But we have a strong management, we have some cash. We have a number of strategic options."