West Coast Editor

La Jolla Pharmaceuticals Inc.'s share price still bore a dent Friday from an analyst's midweek take on less-than-spectacular interim Phase III results with the lupus drug Riquent, and speculation buzzed about players in the race for a viable therapy.

Riquent (abetimus sodium), an orphan drug granted fast-track status by the FDA, is being tested under a special protocol assessment against lupus nephritis, in which the disease attacks the kidney. The compound is designed to reduce autoantibodies to double-stranded DNA, a hallmark of lupus and its renal flares.

"They're hitting the wrong target," Lazard Capital Markets analyst Terence Flynn told BioWorld Today, citing recent research showing that B cells are the more significant element in the disease. Flynn's dissenting report on LJP caused a stir, and other analysts held to their more-favorable ratings on the stock.

San Diego-based La Jolla's interim data were offered at the International Congress on SLE (systemic lupus erythematosus) in May. In the 100-mg, 300-mg and 900-mg Riquent dosages, reductions in median antibody levels between the Riquent groups and the placebo group at week eight reached 30 percent, 40 percent and 58 percent, respectively - 10 percent to 16 percent lower than the company hoped, Flynn noted in a research report.

"They made these projections in an investor presentation that I saw in September of 2006, saying what they expected for the three dose arms," he said, and failure to hit them is "a troubling signal."

He predicted final results from the Phase III study will be the same as those from earlier Phase II/III trials, and Riquent will fail to meet the primary endpoint of time to renal flare. Flynn tagged LJP's stock with a "sell" rating and put the 52-week price target at $1, a fraction of Friday's closing price (NASDAQ:LJPC) of $4.65. The company's 52-week high is $8.68, and the low is $2.77. The global trial is intended to better demonstrate the efficacy of long-struggling Riquent, which has been the subject of an approvable letter requesting more data. (See BioWorld Today, Oct. 18, 2004.)

During her presentation at a Needham & Co. conference last week, LJP's CEO Deirdre Gillespie pointed to Riquent's two mechanisms of action. Not only does the drug knock down autoantibodies to double-stranded DNA, "mop them up and sweep them out of the bloodstream," but it also goes after the B cells that make them, she said. Those B cells comprise less than 1 percent of the total B cells in the body, Gillespie added, so the patient still is able to deal with infections - not the case with other, broader B cell therapies, which suppress the immune system more.

Riquent, Gillespie said, "immobilizes these B cells and in some cases, rolls them over into a cell-death cycle." Flynn, though, said the only published data to be found that supported the B cell claim are contained in animal-model research done more than 10 years ago.

Flynn likes South San Francisco-based Genentech Inc.'s approved rheumatoid arthritis therapy Rituxan (rituximab), which the company is trying against lupus nephritis and SLE. Under way with the anti-B cell therapy Rituxan are a 250-patient Phase II/III trial called EXPLORER and a Phase III trial known as LUNAR. The first trial's endpoint is clinical response after one year, while LUNAR will examine renal response after the same time period. The EXPLORER trial finished enrollment earlier this year, and results are expected in the middle of 2008. LUNAR started in early 2006, and likely will finish enrollment before the end of this year.

Bristol-Myers Squibb Co., of New York, is testing its anti-B cell RA therapy Orencia (abatacept) in Phase II trials against discoid lesions, pericarditis and pleuritis, with the primary endpoint an improvement on the British Isles Lupus Assessment Group index, an 86-question scoring system. Like Rituxan, Orencia already is used off-label for lupus.

Regarding opinion on LJP, negatively oriented Flynn is outnumbered. Among those optimistic about Riquent's chances is St. Louis-based A.G. Edwards' Albert Rauch, who called the first data from the Phase III trial "compelling," initiated coverage of LJP in April with a "buy/speculative" rating and an $11 price objective.

About 1.5 million people in the U.S. are afflicted with lupus, and the systemic form affects about 70 percent, with 50 percent of those suffering with kidney disease.

"We estimate that the number of severe SLE cases in the U.S. is roughly 200,000 to 250,000," Rauch wrote in a research report. "Given our belief that the annual cost of treatment could approach $20,000 on average, this suggests a theoretical U.S. market opportunity of approximately $4.5 billion." Riquent, Rauch noted, has patent protection through 2018.