One of the biotechnology industry's hopes for success in 1995 wasdashed Wednesday when Scios Nova Inc. reported that Auriculin didnot achieve its two primary endpoints in a Phase III trial for thetreatment of acute renal failure (ARF).

Analysis of the data showed Auriculin (anaratide) did not reduce theneed for dialysis nor reduce mortality in the 504-patient, placebo-controlled trial. However, statistical significance was achieved in asubgroup of patients _ those suffering from oliguric ARF, orabnormally low urine output. There are currently no drugs on themarket for ARF.

Auriculin was Scios Nova's lead product. Previous results with thepeptide were impressive enough to attract Genentech Inc., of SouthSan Francisco, which agreed to a deal in December worth up to $100million for marketing rights to the product. Genentech made a $20million equity investment in Scios Nova, at about $9.52 per share,extended its partner access to a $30 million loan, and offered $50million in milestones. (See BioWorld Today, Jan. 4, 1995, p. 1.)

Scios Nova's stock (NASDAQ:SCIO) fell $3 per share Wednesday,or 40 percent, to $3.50. Genentech, which closed down 5 percentMonday, at $47.87, when it appeared Roche Holdings Ltd. would notexercise its $60-per-share buyout option, closed unchangedWednesday at $47.50.

Mark Simon, managing director of Roberston Stephens & Co. in SanFrancisco, said the results came as a surprise, particularly afterGenentech's endorsement of the drug and trial protocol. "The resultsillustrate the total unpredictability of large Phase III trials," he said."Is the industry a dart board? And are we blindfolded?"

Edmund Debler, an analyst with New York-based Mehta and Isaly,called the trial results a "significant setback for Scios Nova. I wouldnot be surprised to see a restructuring, a reduction in work force, andyet another reconfiguration of their focus."

Officials at Scios Nova and Genentech said further analysis of thedata will be necessary before decisions are made on whether topursue the oliguric subset, which is estimated at about 25 percent ofthe 160,000 patients with acute renal failure each year in the U.S.

"We believe we have achieved a significant result in a clearly definedsubgroup," said Kira Bacon, director of investor relations for SciosNova. "We view this as a step on the long and rocky road ofdeveloping a drug. This may not be the drug we had expected orhoped for, but that doesn't necessarily mean it's not going to besuccessful and important."

Scios Nova reported $94 million in cash and marketable securities onMarch 31, and is estimating a burn rate between $15 million and $20million for the year. Other Scios Nova products in the clinic includeNatrecor BNP, which is in Phase II for acute congestive heart failure;and a recombinant basic fibroblast growth factor in Phase III in Japanwith its partner there for intractable dermal ulcers. The company andcollaborators also are working with insulinotropin for Type IIdiabetes and on treatments for Alzheimer's disease.

Jim Weiss, Genentech's senior manager, corporate communications,said the company does these kinds of deals to mitigate risks in whatinherently is a risky business. The $20 million equity investment wasa relatively modest one in that it allowed the company to gain a stakein a potential drug without diverting in-house resources, he said.

"We had a reasonable expectation that the drug would work based onthe Phase II trials, and our understanding of the scientific andmedical issues involved," Weiss said.

Data from a 54-patient Phase II trial of Auriculin showed it reducedthe need for dialysis in ARF patients and showed a reduction inmortality, even though the reduction wasn't statistically significant.Auriculin is the company's form of atrial natriurectic peptide, anaturally occurring hormone that is produced in the heart andbelieved to have activities important to liver function.

In the oliguric subgroup from the Phase III trial, dialysis was neededby 63 percent of the 61 patients taking the drug, and 87 percent of the60 who received placebo. Treatment with Auriculin also increasedthe number of patients who survived for 21 days without requiringdialysis, though it did not reduce mortality in oliguric patients.

Detailed results of the study will be presented at the ThirteenthInternational Congress of Nephrology in Madrid, Spain, on July 6. n

-- Jim Shrine

(c) 1997 American Health Consultants. All rights reserved.