West Coast Editor

A surprise positive opinion from regulators in Europe regarding Encysive Pharmaceuticals Inc.'s Thelin took the sting out of the less happy news from U.S. regulators earlier this year, and Wall Street rewarded the company with a stock boost of about 35 percent.

Encysive's shares (NASDAQ:ENCY) closed Friday at $5.82, up $1.50.

The Committee for Medicinal Products for Human Use, advising the European Agency for the Evaluation of Medicinal Products, recommended approval of Thelin (sitaxentan) for pulmonary arterial hypertension (PAH).

A decision from the European Commission is expected within about 90 days. If approved, the endothelin blocker could be marketed in all 25 member states of the European Union.

In late March, Encysive heard from the FDA that the drug is approvable in the U.S., but more trials must be done, and the agency's demand knocked almost half the value off the company's shares, which closed that day at $4.60. Encysive submitted a complete response last month. (See BioWorld Today, March 28, 2006.)

As analyst opinion ranged all over the map, a spokesperson for Houston-based Encysive said the company is choosing not to comment on the news from Europe.

"The biggest problem is that the company isn't disclosing the reason behind the approvable letter," either, said Andrew Fein, analyst with C.E. Unterberg, Towbin, who maintained his "underperform" rating.

Progress in Europe means that "to some extent, you can rule out worst-case scenario rumors - severe bleeding and all that - but, fundamentally, it probably doesn't change anything," Fein told BioWorld Today, adding that Encysive will be able to launch only in the UK and Germany without going through the pricing process, which can take "months to over a year."

Phil Nadeau, analyst with Cowen and Co. LLC, upgraded Encysive's shares from "neutral" to "outperform" on the news from Europe, noting in a research report that "most had assumed that the European regulators, similar to the U.S., would request additional clinical trials prior to approval" but how "it seems very likely" Thelin will be marketed in Europe by the fourth quarter.

Nadeau raised his ex-U.S. sales estimates for Thelin from zero to $40 million for next year, from $32 million to $70 million for 2008, from $58 million to $100 million for 2009, and from $84 million to $135 million for 2010.

Also upgrading were Oppenheimer & Co. and Rodman & Renshaw.

Others, like Fein, proved more circumspect. Mark Monane at Needham & Co. LLC kept his "hold" rating on Encysive because of the problems in the U.S., though he conceded in a research report that reimbursement is "unusually strong" for PAH in Europe.

Jennifer Chao, with Deutsche Bank, maintained her "hold" rating, too, calling the European action "incrementally positive, implying ongoing FDA concerns may be less threatening," but pointing out that overseas approval "does not necessarily represent a good proxy for predicting FDA outlook." Chao expects Encysive to hear from the FDA later this month.

Thelin would go up against Allschwil, Switzerland-based Actelion Ltd.'s Tracleer (bosentan), the only approved endothelin agonist for PAH, which won clearance in Europe four years ago and was cleared in the U.S. in November 2001.

Fein called the EU "highly price sensitive." Though Encysive seems willing to price below Tracleer, "we believe the impact on revenues will be small," he wrote in a research report. Fein estimated Tracleer sells about $200 million per year in Europe.

Also in the PAH game is Denver-based Myogen Inc., with Phase III ambrisentan, described as a non-sulfonamide, propanoic acid-class, type-A selective endothelin receptor antagonist. Top-line data of ambrisentan disclosed in December showed the drug improved patients' exercise capacity, as well as a key secondary endpoint of time to clinical worsening. (See BioWorld Today, Dec. 13, 2005.)

Others to make news in PAH recently include CoTherix Inc., of South San Francisco, which started a Phase III trial of Ventavis (iloprost) inhalation solution in combination with sildenafil citrate. Called VISION (Ventavis Inhalation with Sildenafil to Improve and Optimize Pulmonary Arterial Hypertension), the study involves 180 patients who will be randomized to one of three treatment groups for 16 weeks. The primary clinical endpoint is an increase in the distance walked in six minutes.

Ventavis is CoTherix's prostacyclin, cleared for PAH at the end of 2004. United Therapeutics Inc., of Silver Springs, Md., has another prostacyclin, Remodulin (treprostinil), granted approval in the U.S. in May 2002.

A year ago, New York-based Pfizer Inc. won approval for Revatio, its lower-dose form of sildenafil citrate (the active ingredient in the erectile-dysfunction drug Viagra) for PAH. (See BioWorld Today, June 7, 2005.)

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Also gaining a positive nod from the European panel was Framingham, Mass.-based GTC Biotherapeutics Inc.'s recombinant antithrombin ATryn, and Copenhagen, Denmark-based TopoTarget A/S' topoisomerase II inhibitor, Savene.

Members recommended ATryn for the prophylaxis of thromboembolism in surgery on patients with congenital antithrombin deficiency. GTC's stock (NASDAQ:GTCB) soared nearly 85 percent on the news, closing Friday at $1.81, up 83 cents.

Savene (dexrazoxane) is designed to be given intravenously as an antidote when anthracyclines accidentally are infused outside the vein and into surrounding tissue. In April, the FDA granted priority review for the product in the U.S., where it is branded Totect.

On the pharma side, F. Hoffmann-La Roche Ltd., of Basel, Switzerland, said it received a recommendation for approval of MabThera (rituximab) from the Committee for Medicinal Products for Human Use for the treatment of rheumatoid arthritis in Europe. MabThera, a B-cell therapy, previously was approved in the U.S. under the brand name Rituxan, and marketed by South San Francisco-based Genentech Inc. and Cambridge, Mass.-based Biogen Idec Inc.

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