Two months after cutting nearly half its work force in the wake of increasing competition to its macular degeneration product, QLT Inc. reported disappointing preliminary results for its Phase II trial of its light-activated drug, lemuteporfin, in benign prostatic hyperplasia.

Three-month data showed that the product, a photosensitizer formerly known as LT0074, did not meet the primary efficacy objective in the 180-patient study, showing no significant difference between the treatment and control groups. Detailed data are not available at this time.

"These are preliminary data," said Tamara Hicks, spokeswoman for the Vancouver, British Columbia-based firm, "and we will continue to look at the data through six months."

Essentially, the early data pre-empts immediate plans for a Phase III study and potential approval of lemuteporfin in BPH, an indication that involves a non-malignant form of prostate disease and could generate worldwide drug sales of $250 million.

"It’s another piece of bad news," said analyst Paul Latta, with Seattle-based McAdams Wright Ragen, but lemuteporfin-injectable is "really outside of the company’s core" macular degeneration program.

Wall Street was bothered little. The company’s stock (NASDAQ:QLTI) gained 2 cents Thursday to close at $6.77.

"From our perspective, we regarded the lemuteporfin-injectable study as a bit of a long shot," Latta told BioWorld Today, "though it certainly would’ve helped their pipeline, which is a little on the thin side."

The negligible impact on QLT’s shares also could be attributed "to the fact that the stock’s been beaten up pretty heavily for the last year or two," he added.

The company, which was trading at around $15 at this time last year, watched its shares slide since then, as its lead product, Visudyne (verteporfin) photodynamic therapy, faced competition in the wet age-related macular degeneration (AMD) market with the January 2005 launch of Macugen (pegaptanib sodium injection, from Melville, N.Y.-based OSI Pharmaceuticals Inc.). Interest in Visudyne waned even more after South San Francisco-based Genentech Inc. released promising pivotal data for its anti-angiogenic drug Lucentis (ranibizumab, now under review at the FDA).

Shares of QLT fell 11 percent in November to close at $6.57 when results showed that Lucentis improved visual acuity over Visudyne in a head-to-head study. (See BioWorld Today, Nov. 9, 2005.)

Approved in 2000, QLT’s photodynamic therapy was the first AMD drug to hit the market, but "right now, it doesn’t seem to be the cat’s meow among retinal specialists," Latta said.

In December, QLT let go employees and reduced guidance on Visudyne sales for 2005, from the $500 million to $530 million range to between $480 million and $485 million. (See BioWorld Today, Dec. 9, 2005.)

In the meantime, the company is continuing to study Visudyne in combination with steroids, and focusing on other approaches to treat macular degeneration. QLT also might consider using its Atrigel drug delivery technology to improve the administration of its own AMD drugs or even a competitor’s product, Latta said.

"The company hasn’t spoken specifically to that, but it would be one way that they can sort of keep their foot in the door," he said.

The Atrigel system, which incorporates a biodegradable polymer dissolved into biocompatible carriers for sustained-release over an extended period of time, is used in the company’s prostate cancer product, Eligard, an extended-release injectable depot available in one-, three- and four-month formulations. That product was gained through QLT’s 2004 acquisition of Fort Collins, Colo.-based Atrix Laboratories Inc., and is partnered with Paris-based Sanofi-Aventis.

That technology could prove to be a boon to the AMD market, Latta said.

"The problem with the new competitors like Lucentis, is that while their efficacy in clinical trials seems to be quite compelling," he said, "they involve relatively frequent intraocular injections, and patients are not really enthused about the prospect of putting needles into their eyes on a relatively frequent basis."

Other potential applications for the Atrigel system include a formulation for QLT’s octreotide to treat carcinoid tumors syndrome and acromegaly, as well as potential use in diabetic retinopathy.

With QLT, "all’s on the table right now," Latta said, adding that its ability to "defend its existing franchise and build a pipeline of new potential products," will be the deciding factors for the company’s future.