Positive interim survival data from a Phase II skin cancer study of Zadaxin, an immunomodulator, pushed SciClone Pharmaceuticals Inc.'s stock up more than 38 percent.

Shares of the San Mateo, Calif.-based firm, (NASDAQ:SCLN) which traded as high as $4.16 Friday morning, ended the day at $3.13, up 87 cents. New York-based Jefferies & Co. Inc. upped SciClone's price target to $3.50 on the data, though it's maintaining a "hold" rating pending a report of the final trial results, expected at the annual American Society of Clinical Oncology meeting in June.

Data from the ongoing study, which is being conducted by SciClone's European partner, Sigma-Tau SpA, of Rome, show that all patients receiving Zadaxin in combination with standard of care - dacarbazine (DTIC) chemotherapy, with or without interferon alpha - had a longer median survival compared to standard-of-care treatment alone. Those data are culled from 386 patients in the first four arms of the trial. A fifth arm, which is evaluating the addition of Zadaxin 6.4 mg to DTIC and interferon alpha, recently finished treating patients, who continue to be followed according to protocol.

"We're quite pleased about where we see this product going," said Rick Waldron, chief financial officer for SciClone. "We have the opportunity of having a safe and well-tolerated drug" that has shown a survival benefit in late-stage melanoma, an indication "where notoriously nothing has shown any real improvement."

Existing therapies do not increase overall patient survival, which is defined as about six to nine months in patients once the melanoma has spread within the body. At that point, "targeted therapies may have a limited capability," Waldron said, whereas Zadaxin, a synthetic version of a naturally occurring peptide thymosin alpha 1, is designed to promote T-cell maturation and increase immune system response.

The addition of Zadaxin to standard therapy could "give the immune system the opportunity of doing what it's supposed to be doing well," he added.

Interim results show that the addition of 3.2 mg of Zadaxin (thymalfasin) to dacarbazine (DTIC) chemotherapy increased the median survival to 10.2 months vs. 6.6 months for Stage IV malignant melanoma patients receiving DTIC chemotherapy with interferon alpha. In the two treatment arms in which patients received either 1.6 mg or 3.2 mg of Zadaxin in combination with both DTIC and interferon, median survival was 8.8 months and 9.9 months, respectively.

If those data are confirmed in future studies, it might be possible to provide a treatment regimen of chemotherapy and Zadaxin without interferon, said CEO Friedhelm Blobel, which would eliminate the "nasty side effects of interferon" and have a "positive influence on patients' quality of life."

For SciClone, "the next steps are to talk to the FDA about the design of a Phase III trial," Blobel told BioWorld Today, and to prepare to present full analysis of the Phase II study at ASCO next year. "If these things move ahead in a positive way, we could see enrollment in [a pivotal study] in the second half of 2007."

Overall survival is a secondary endpoint in the Phase II study, along with duration of response, time to disease progression and immunological response.

The trial's primary endpoint is overall tumor response, and results continue to show positive trends there, as well. In December 2005, the company reported interim results from 270 patients demonstrating a distinct Zadaxin dose-dependent response in combination with DTIC chemotherapy with and without low-dose interferon alpha. Tumor response data were based on RECIST criteria.

Depending on final results from Phase II, the company is hoping that "one sufficiently powered Phase III might be enough" for regulatory approval, Blobel said, though he declined to speculate further on a timeline for getting Zadaxin to market.

Zadaxin received orphan status earlier this year for Stage IIb through Stage IV malignant melanoma.

SciClone licensed European rights to the drug to Sigma-Tau, but retains rights in the rest of the world. In the melanoma market, SciClone might consider handling some commercialization on its own and "has several options," Blobel said.

Beyond melanoma, the companies are studying Zadaxin in hepatitis C. They initially planned to first seek commercialization of the drug in that indication, but Zadaxin missed its endpoint in two Phase III trials, failing to show a statistically significant benefit in sustained viral response or histologic improvement when administered in combination with pegylated interferon alpha and evaluated against pegylated interferon alpha alone. Sigma-Tau now is working on another Phase III trial, involving 550 patients in Europe, to test the compound as part of a triple therapy combination with both pegylated interferon and ribavirin. That study is "getting toward the end of enrollment," Blobel said. (See BioWorld Today, Dec. 15, 2005.)

Zadaxin also has shown hints of efficacy in primary liver cancer, after a 25-patient pilot study showed promising results earlier this year. Data demonstrated that patients treated with Zadaxin plus trans-arterial chemoembolization (TACE) showed a median survival of 994 days vs. 399 days for patients receiving TACE alone.

In separate news, SciClone adopted a shareholders rights plan, which will be triggered if any group or individual acquires 15 percent or more of the company's outstanding stock.