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The ups and downs that have marked IntraBiotics Pharmaceuticals Inc.'s recent history continued, as the company said the first glimpse of unblinded data from its Phase III iseganan hydrochloride oral solution showed the product fared poorly against placebo in primary and secondary endpoints, sending its stock crashing 69.5 percent.

Top-line results from the 545-patient trial showed iseganan, which was designed to reduce or prevent ulcerative oral mucositis in those undergoing radiotherapy, showed no greater benefit than placebo.

Mountain View, Calif.-based IntraBiotics' stock (NASDAQ:IBPI) shed $2.71 in value Monday, to close at $1.19. The data were released after the markets closed on Friday.

"It appears the drug and placebo were virtually identical across primary and secondary endpoints, and both were better than the standard of care," said Eric Bjerkholt, senior vice president and chief financial officer at IntraBiotics. "The only conclusion is that iseganan does not work to prevent oral mucositis in the radiation setting."

IntraBiotics will continue to analyze the data and present it in full at the 38th annual meeting of the American Society of Clinical Oncology May 21.

However, the near-term hopes for an iseganan approval now seem to rest on the company's chemotherapy Phase III trial, which is under way.

"We've got a Phase III trial in bone marrow transplant patients receiving high-dose chemotherapy," Bjerkholt said. "The enrollment is going very well; we should be fully enrolled by the end of the second quarter. We enrolled more than 100 patients in April."

Iseganan is from the class of antibiotic peptide drugs known as protegrins - the naturally occurring substances in mammals that are part of the defense against invading bacteria and fungi. In April 2001, when it was still called Protegrin IB-367 Rinse, iseganan failed in a Phase III chemotherapy trial due to a third-party vendor dosing error that ruined data on 102 patients. News of the error and the subsequent missed primary endpoint dropped IntraBiotics' stock 20 percent. One month earlier, the company suffered a 33 percent stock drop due to an enrollment delay for its product, Ramoplanin Oral, designed to reduce the incidence of bloodstream infections due to vancomycin-resistant enterococci in cancer patients known to carry the bacteria in their intestines. (See BioWorld Today, March 13, 2001, and April 27, 2001.)

At the end of April, IntraBiotics acquired Apothogen Inc. and all its management, including Ernest Mario, the company's founder. Mario now is IntraBiotics' CEO and chairman and the company has openly stated its intention of in-licensing other products. The company's stock rose 51 cents, or about 12.5 percent, to close at $4.58 when news of the acquisition and new CEO were made public. (See BioWorld Today, April 26, 2002.)

Following the dosing error, IntraBiotics made the decision to narrow its focus to only iseganan. It cut its work force by 70 percent and implemented other changes meant to save the company between $7 million and $8 million per quarter. With the failed radiation trial, that narrow focus is now narrower. (See BioWorld Today, June 1, 2001.)

The chemotherapy trial is IntraBiotics' next hurdle. Data from the trial should be available by year's end, the company said. Also, IntraBiotics is planning a Phase II trial of iseganan in ventilator-assisted pneumonia in the second half of this year, something Bjerkholt called "a high priority," and early stage trials have been completed with the product for the treatment of respiratory infections associated with cystic fibrosis.

"After the results of the chemotherapy trial, we will meet with the FDA and, depending on the results, we'll see what the path going forward is," Bjerkholt told BioWorld Today. "The question is whether the FDA will let us file on a successful chemotherapy trial and a botched chemotherapy trial, or will they request an additional study. We just don't know what the FDA will require."

In a research note by SG Cowen Securities Corp. in New York, analyst Eric Schmidt wrote: "It is possible that the strong efficacy trends in the first chemotherapy trial, if combined with highly positive results in the second, could be sufficient to support an FDA filing. It is also possible, however, that [IntraBiotics] would have to do a fourth Phase III trial."

But Schmidt also said, "Dr. Mario has a first-rate reputation and a demonstrated ability to build premier companies. We therefore believe that, despite iseganan's latest disappointment, it is too early to count IntraBiotics out. With just over $43 million in net cash, and an estimated 2002 cash burn of $30 million, IntraBiotics has sufficient resources to fund operations through mid-2003."

Bjerkholt agreed with Schmidt's assessment.

"It's a bump in the road; it's not more than that," he said. "We're still very excited about iseganan for chemotherapy [and the other indications]."