By Charles Craig

A Phase III trial of OraVax Inc.'s monoclonal antibody, HNK20, against development of severe infections in children with respiratory syncytial virus (RSV), did not achieve its primary endpoint, which was reducing hospitalizations.

However, the Cambridge, Mass., company said HNK20 did significantly reduce the incidence of lower respiratory tract infections, which are principally viral pneumonia, caused by RSV.

Despite positive evidence of the drug's activity, OraVax's stock (NASDAQ:ORVX) plummeted 46 percent Wednesday, ending at $3.50. The company went public in June 1995 at $10 per share.

HNK20 is designed to stimulate immunoglobulin A antibodies of the mucosal immune system to prevent infections. The drug is administered in nose drops.

The Phase III study — conducted in Australia, New Zealand, South Africa and Argentina from May to November last year — enrolled 614 infants who were born prematurely or who had bronchopulmonary dysplasia. Those children are most at risk of developing complications from RSV, which is active during the winter months. The infants were given either HNK20 or a placebo.

The primary endpoint was reduction in hospitalizations required for treatment of severe lower respiratory tract infections caused by RSV. Of the 308 children in the placebo group, 35 were hospitalized compared with 31 of the 306 infants in the drug treatment group, meaning HNK20 did not achieve statistical significance in reducing hospital stays.

The antibody, however, did achieve a 24 percent reduction in incidence of severe lower respiratory tract infection. In addition, 68 of the infants in the placebo group developed RSV compared with 54 in the treatment group.

Lance Gordon, OraVax's president and CEO, said analysis of the data continues. A planned Phase III trial of the antibody this winter in the Northern Hemisphere will not be conducted.

Gordon said OraVax is exploring options for HNK20 and one of them is a dose-ranging study to determine if the antibody, which has proved safe at seven times the dosage used in the Phase III trial, would be more effective at a higher dose.

He added HNK20's positive activity against RSV infections makes it an attractive drug candidate for corporate partnership, and negotiations are ongoing.

Gordon also noted OraVax's RSV program is one of four at the company.

"The Helicobacter pylori program is the largest," he said. "We have a global joint venture and issued patents."

The company's most advanced product against H. pylori, which is responsible for chronic gastritis and peptic ulcers and may be linked to stomach cancer, is a urease-based oral vaccine in Phase II trials. Additional clinical studies are planned this year.

OraVax is collaborating with Pasteur-Merieux Serums et Vaccins S.A., of Lyon, France, on H. pylori drug and vaccine development. Pasteur-Merieux is a subsidiary of Paris-based Rhone-Poulenc Group.

Last fall, OraVax and Pasteur-Merieux licensed rights to the complete genomic sequence of H. pylori from MedImmune Inc., of Gaithersburg, Md., and Human Genome Sciences Inc., of Rockville, Md.

OraVax ended 1996 with $22 million in cash and reported a net loss of $21.6 million for the year. *