Under-a-dollar shares of DOR BioPharma Inc. lost more than half their value after the FDA issued a not approvable letter for orBec, a steroid-sparing agent, citing the need for further efficacy and safety data in patients with gastrointestinal graft-vs.-host disease, a complication of hematopoietic cell transplantation.

The news clearly took some investors by surprise, as DOR's stock (OTC BB:DORB) fell 27 cents, or 58 percent, Friday to close at 19 cents, even though the application got a thumbs down from an FDA advisory panel in May. At that time, reviewers noted that orBec data were pooled from two studies and that differences in the designs and formulations used for each study made it difficult to draw clear efficacy conclusions. The panel indicated that additional studies might be necessary. (See BioWorld Today, May 10, 2007.)

But Ewing, N.J.-based DOR continued to hold out hope that the agency would take into account orBec's positive results in the difficult-to-treat GI GVHD indication, one of the most common causes of bone marrow and stem cell transplant failure. OrBec, an oral, locally active therapy, is designed to reduce patients' need for systemic immunosuppressive drugs that can weaken their immune system and undermine the transplantation.

OrBec's new drug application included Phase III data showing that survival 200 days after allogeneic hematopoietic stem cell transplantation produced a 66 percent reduction in mortality among patients randomized to orBec.

A year after randomization, patients suffered fewer systemic immunosuppressive side effects and a reduced treatment failure. DOR combined that pivotal data with a retrospective analysis of Phase II results, which showed a 55 percent reduction in mortality 200 days after transplant.

DOR could not be reached for comment, but the company stated in a press release that it remains committed to the orBec program in GI GVHD and intends to meet with the FDA to determine its next steps. A decision from European regulators is pending on an overseas marketing application for orBec in GI GVHD.

The company also said it would be reviewing business development opportunities now that orBec might not provide near-term revenue but did not elaborate on what those might be.

Also undergoing tests in GVHD prophylaxis, orBec is the company's most advanced product. The rest of its pipeline, which includes an oral delivery for leuprolide in prostate cancer and endometriosis, as well as biodefense vaccines against ricin and botulism toxins, is in early clinical or preclinical development.

As of June 30, the company had cash and cash equivalents of $3.7 million.

Earlier this year, DOR rejected an unsolicited acquisition bid by Cell Therapeutics Inc. The Seattle-based firm offered in January to buy DOR in a deal valued at about $50 million, plus a $15 million milestone payment upon the approval of orBec. DOR, however, had to wait two months for Gaithersburg, Md.-based Sigma-Tau Pharmaceuticals Inc.'s exclusive option to orBec and other pipeline candidates to expire before considering CTI's offer, which it later deemed inadequate. CTI withdrew its offer to acquire DOR in April. (See BioWorld Today, Jan. 22, 2007, and April 13, 2007.)