West Coast Editor

On the brink of the Labor Day holiday, Genelabs Technologies Inc. saw gratifying results from the sometimes-uphill labor on behalf of its lupus drug, Prestara (prasterone), as the company's stock more than doubled on news of an approvable letter from the FDA.

Genelabs' stock (NASDAQ:GNLB) closed Friday at $2.82, up $1.43, or 102.9 percent.

The agency agreed that Genelabs' study called GL95-02 showed a positive effect on bone mineral density in women with mild to moderate systemic lupus erythematosus while on low-dose glucocorticoids, but said approval is contingent upon another trial confirming the benefit, which the FDA has told Genelabs could last six months.

"We do [have to conduct another trial], but look at where we were two days ago," said Matthew Loar, chief financial officer of the Redwood, Calif.-based company, which earlier received a not-approvable letter from the agency. Genelabs will be working with the FDA to finalize trial design and other issues, such as data related to qualifying a manufacturing site.

If it's ultimately marketed, Prestara - previously known as Aslera or GL701, and licensed to Corona, Calif.-based Watson Pharmaceuticals Inc. - will be the first new lupus treatment in 40 years.

"Nothing has been approved since the FDA began requiring well-controlled clinical trials," Loar told BioWorld Today. Genelabs conducted those trials, he added, and the road has not always been smooth for orally administered Prestara, the synthetic equivalent of dehydroepiandrosterone, or DHEA, a naturally occurring hormone.

"We wanted to capture the overall aspects of the disease, and the endpoints are soft," he said. "You've got a disease that has only one or two symptoms that may be evident at any point in time, and they vary significantly from patient to patient. And the disease itself waxes and wanes."

Just over a year ago, the FDA gave Genelabs the not-approvable letter, which the company said at the time was related to interpretations of data. The stock tumbled 43.8 percent that day, ending at $1.95, and had hit a low two months earlier - dropping 53 percent to end at $1.75 - when an FDA review prior to a panel meeting led investors to believe trial data did not support the lupus drug's approval, although the panel did not vote on whether to recommend it. (See BioWorld Today, June 28, 2001, and April 20, 2001.)

"We were hoping they would take a vote," Loar said. "What you could hear from the discussion is that the rheumatologists on the panel in general were favorable, but two of the three statisticians were not, because they were concerned with amendments we made to the protocol after enrollment started, potentially introducing bias."

Since the bad news from the FDA, he said, "we've been sending out messages that not-approvable letters don't mean the end of things."

Genelabs already has conducted two Phase III trials. The primary endpoint in the first was reduction in corticosteroids use, and in the second it was stabilization or improvement of disease. It was the second trial, GL95-02, that included measurement of bone density, which wasn't measured in the first trial because equipment wasn't as widely available, Loar said.

GL95-02 enrolled 381 women medicated for up to one year and contained a nested study of patients whose bone mineral density was measured at both the initiation and completion of the clinical trial.

Thirty-seven were on trial medication for a full year and were treated with glucocorticoids for at least six months prior to the initiation of the trial. They had a baseline bone mineral density measurement and a post-treatment bone mineral density measurement taken within one week of completion of the study. Data regarding those patients were presented in April 2001 to the Arthritis Advisory Committee, which did not vote on whether to recommend approval but discussed interpretations of the data.

"The FDA had posed several questions to the panel at the beginning, asking what you look at in lupus, what's meaningful, and how you measure overall disease activity," along with other questions, Loar said, and the agency did not insist on a vote at the end of the meeting.

In February, Genelabs submitted more analyses to the FDA from GL95-02 and from published studies that have been conducted by others. The GL95-02 analyses included all patients who had both baseline and post-baseline measurements of bone mineral density, and found that mean bone mineral density of the lumbar spine and hip significantly increased in the group of patients treated with Prestara, whereas those in the placebo group decreased.

Although other signs and symptoms of the disease may be subjective, "you cannot really debate bone mineral density," Loar said.

He said the additional trial's protocol has yet to be firmed up. "If [patients are] six months on medication, there's no way to do it in less than that," he said. "We've got designs in mind, but we need to sit down with the FDA and get their blessing on everything," he said.

The company had about $16 million in cash in early July, Loar said.

"We may need to raise additional funds to complete the trial and go through the analysis phase," he said, but the company does not expect to have problems doing so.

The deal with Watson for North American marketing rights was entered in November 2000, and included an initial payment of $13 million, with fees and milestones potentially totaling $55 million, including a $10 million payment on FDA approval, Elliot Wilbur, a research analyst with CIBC World Markets in New York, said in a research note in June. (See BioWorld Today, Nov. 14, 2000.)