The introduction of Genentech Inc.'s Lucentis last year may have offered a new highly effective therapy to patients with wet age-related macular degeneration, but it has crushed other companies developing products in that space.

The latest firm affected is Genaera Corp., of Plymouth Meeting, Pa., which announced late Wednesday it will terminate development of its wet AMD product Evizon (squalamine lactate). The company also said it is dropping its work force by 30 percent - reducing its staff to 32 employees - and engaging Banc of America Securities LLC as a financial advisor to review strategic alternatives.

While the company said it plans to start a Phase I study of trodusquemine (MSI-1436) for obesity in the first half of this year, it appears to be considering all options going forward, including divesting its assets. Genaera's stock (NASDAQ:GENR) dropped 34.5 percent, or 14 cents on Thursday, to close at 26 cents.

Enrollment of the Evizon Phase III trial, Study 212, had been slow and preliminary data indicated the drug wouldn't offer vision improvement at the degree needed for approval.

"The market for treatments of wet AMD has undergone a rapid and dramatic shift. It is difficult," said Jack Armstrong, Genaera's president and CEO, on a conference call, "to overestimate the impact that the availability, the clinical success and the rapid uptake of Genentech's Lucentis and the continued off-label use of Avastin has had on wet age-related macular degeneration treatment standards and, consequently, on the marketplace. It has affected everyone."

The decision to drop development came after a comprehensive review of the challenges facing Evizon. Approved last June, Lucentis, from South San Francisco-based Genentech Inc., demonstrated stunning Phase III data in which 95 percent of treated patients maintained their vision, and more than a third experienced a clinically significant improvement of at least three lines on a study eye chart at one year.

Its success caused the FDA to change the clinical endpoints required for approval of a wet AMD treatment. Before, the gold standard was an endpoint of vision preservation and stabilization, which Evizon demonstrated in Phase II trials. But the new standard is an endpoint of significant and rapid vision restoration, something it did not appear Evizon would achieve even when using doses higher than the 40 mg used in the Phase II trials.

Also, the availability of Lucentis "significantly limited" Genaera's ability to enroll Study 212. "Clinicians simply do not want to put their patients on an investigational drug with an unknown affect on visual acuity when they believe available treatments can rapidly improve vision," Armstrong said.

While trials with placebo arms still are allowable by the FDA, they are not only difficult to enroll but "ethically questionable," Armstrong said. He added that the degree of improvement with any drug must be similar to that seen with Lucentis. Combination studies would need to show that the combination is better than either drug alone, and maintenance therapies need to show a decrease in dosing frequency when compared to approved products. If Genaera had chosen to pursue any of those routes to approval, it would have been a risky and expensive move.

"To date, we've had no three-line improvers in Study 212 on any dose," Armstrong said. "We have not seen levels of vision restoration in patients on higher doses of Evizon that compare to the improvements seen in patients on Lucentis or Avastin," the Genentech cancer drug used off-label for wet AMD.

Lucentis (ranibizumab) pulled in $153 million in its first full quarter on the market, earning $10 million on its first day. In the third quarter, about 80 percent of Lucentis patients had switched from competitive products, which include the Visudyne photodynamic therapy (from QLT Inc.) and Macugen (from OSI Pharmaceuticals Inc.), as well as Avastin. All three, like Lucentis, are VEGF inhibitors.

But as Phase III data of Lucentis began to emerge in 2005, OSI bought out Macugen's original developer Eyetech Pharmaceuticals Inc., and QLT restructured and cut its staff by 46 percent. (See BioWorld Today, Nov. 15, 2005, and Dec. 9, 2005.)

Since Lucentis' approval, OSI decided to "suspend or curtail" its research in the eye disease area, and QLT experienced a 26 percent decrease in Visudyne sales.

Aside from Evizon, other wet AMD drugs in late stage development have included Cand5 (from Acuity Pharmaceuticals Inc.) and Sirna-027 (from Sirna Therapeutics Inc., recently acquired by Merck & Co. Inc.).

Armstrong said information from Evizon's Phase III trial and "the lack of interest from prospective partners make it apparent that the company's resources would be better used on more viable programs like trodusquemine."

As of Sept. 30, Genaera had $37.7 million in cash and cash equivalents, which is expected to last the company into 2008, beyond the time Phase I data of trodusquemine is expected. The drug is an appetite-suppressant discovered at Genaera that has caused weight loss and has normalized both fasting blood glucose and blood cholesterol levels in animals models of obesity. The company hopes the product will offer a profound and sustained weight loss without the anxiety and gastrointestinal side effects of marketed drugs.

While Banc of America presents Genaera with a "full range of strategic alternatives," Armstrong said the company will continue to develop its pipeline products. They include squalamine for cancer, interleukin-9 antibody for respiratory disorders, Lomucin for chronic respiratory disease and the topical antimicrobial Locilex.

Genaera expects to incur a $300,000 charge in the first quarter associated with its work force reduction.