By Karen Pihl-Carey

Isis Pharmaceuticals Inc.¿s stock dropped sharply Wednesday following news that the company¿s lead compound for Crohn¿s disease failed in a pivotal trial.

Data from the Phase III trial of Isis 2302 showed results drastically differed from what investigators observed in an interim analysis. The drug failed to demonstrate a statistically significant difference from placebo.

¿If we simply had extrapolated the data that we had at the interim analysis, we would have had a statistically significant result in favor of the drug,¿ Isis Chairman and CEO Stanley Crooke said. ¿So this is an enormous shock to us.¿

The disappointing news means Isis will significantly restructure to reduce its burn rate, and the expected filing of a new drug application for Isis 2302 in Crohn¿s disease will not happen in the first quarter of 2000, if at all.

Trading of the company¿s stock (NASDAQ:ISIP) was halted Wednesday until the company issued a press release and held a conference call about the failure. Once trading began, the stock plummeted 64 percent to close at $5.593, down $9.906. The company has 30 million shares outstanding.

¿It¿s obviously very disappointing,¿ said Fariba Ghodsian, an analyst with Cruttenden Roth Inc. in Los Angeles. ¿The fact that the interim analysis was quite positive and the second half of the patients showed such a different result, almost the opposite, that¿s what¿s quite unexpected.¿

A total of 300 patients were enrolled in the study. They were divided into three groups: those receiving two weeks of therapy with Isis 2302; those receiving four weeks of therapy with the drug; and those receiving placebo. In late 1998, once 150 patients were enrolled, the company held an interim analysis.

The analysis showed Isis 2302 induced complete steroid-free clinical remissions in 29 percent of patients treated, while the placebo response rate was 14 percent. But in the second half of the study, the results ¿completely reversed,¿ Crooke said. Only 13 percent of patients treated with the drug reached the remission endpoint, while 22 percent of those on placebo reached it.

Overall, the drug was well tolerated, and about 20 percent of patients in all three arms of the study reached the combined primary endpoint of clinical remission plus complete steroid withdrawal.

Another interesting difference between the first and second parts of the study is that the placebo dropout rate declined significantly from 34 percent to 6 percent, while the Isis 2302 dropout rate remained the same at about 16 percent, Crooke said.

¿We have always prepared for the contingency that we would have a clinical trial that didn¿t work out. This is drug discovery and development, and such things happen,¿ he said. ¿So what we¿ve done is we¿ve dusted off our plans. And over the next several weeks we will make decisions, and we will implement them after the first of the year.¿

Although Isis has other drugs in its pipeline, none will have pivotal data available in the near future, Ghodsian said. That puts some financial pressure on the company, she added. Her firm estimated the company¿s burn rate would be $43 million for 1999, but that included a marketing partnership expected for Isis 2302 in Crohn¿s disease. Without the partnership, Isis¿ burn rate rises to about $50 million, Ghodsian said. Crooke said the company will have $53 million in cash at year¿s end.

While the company¿s corporate collaborations will continue to help fund research and development efforts, senior officials will consider options to increase shareholder value, which could include a merger, Crooke said.

¿Frankly, I think they have a very strong antisense portfolio, perhaps the strongest,¿ Ghodsian told BioWorld Today. ¿So, I think that could be a very valuable asset for another company.¿

Crooke and Ghodsian agree the negative Phase III data is not a reflection on antisense technologies in general. The technology works, Crooke said.

¿After all, we¿ve been making small-molecule drugs for 100 years, and yet still most small-molecule drugs fail. It doesn¿t invalidate the technology,¿ he said.

But whether Isis 2302 will continue as a possible therapy for Crohn¿s disease depends on what the company discovers in a more detailed analysis of the Phase III trial. Crooke said there doesn¿t appear to be a difference in the severity of the disease between patients in the first and second halves of the study. It appears both groups of patients were treated at the same clinics. The company also double-checked the blinding of the trial and the administration of the drug.

Fewer women were enrolled in the drug arms in the second half of the study, which may suggest Isis 2302 is more effective in women than in men, Crooke said. Ghodsian said Crohn¿s disease is a difficult indication because it has ¿periods of exacerbation,¿ or the tendency to flare up.

¿We are examining many other variables in attempting to understand what could have resulted in these anomalous results,¿ Crooke said. ¿Indeed, it is a very peculiar study, perhaps the strangest outcome that I have ever observed. We need to sort out over time how to explain some of this.¿

Isis has one marketed product, Vitravene (fomivirsen), which became the first antisense drug to be approved by the FDA in August 1998. The product, partnered with CIBA Vision, a division of Basel, Switzerland-based Novartis AG, treats cytomegalovirus in AIDS patients.

Isis 2302, an antisense inhibitor of intercellular adhesion molecule-1, or ICAM-1, also is in Phase II trials in renal transplant rejection, and just recently began a Phase IIa study of a topical formulation in psoriasis and another Phase IIa study of an enema formulation in ulcerative colitis.

In addition, the company is moving Isis 3521, an inhibitor of protein kinase C-alpha expression, into a Phase III trial for non-small-cell lung cancer. The compound also is in Phase II studies in other cancer indications. Isis 5132, an antisense inhibitor of c-raf kinase, is in Phase II trials for breast and ovarian cancers. In November, Isis regained rights to the two drugs from Novartis. (See BioWorld Today, Nov. 23, 1999, p. 1.)

Isis also regained rights to Isis 2302 when Boehringer Ingelheim International GmbH, of Ingelheim, Germany, its five-year development partner, returned them. (See BioWorld Today, Sept. 3, 1999, p. 1.)

Isis planned to partner the drug again, but was stopped short with the negative Phase III data.

¿We decided shortly after we made the Boehringer Ingelheim announcement that we were confident enough that the data were going to be positive that we would wait until we signed a deal before we unblinded the data,¿ Crooke said, ¿because we thought we would have better value in our partnership discussions. That didn¿t work out.¿