Reports of two patient deaths following the use of its NeutroSpec diagnostic product prompted Palatin Technologies Inc. to voluntarily halt sales while initiating further review of the product with the FDA.

The Cranbury, N.J.-based company and partner Tyco Healthcare Mallinckrodt also are recalling all existing customer inventories of NeutroSpec, a radiolabeled monoclonal antibody imaging agent approved in July 2004 to diagnose atypical or hard-to-diagnose appendicitis. Made of a technetium-labeled anti-CD 15 monoclonal antibody, the product works by selectively binding to neutrophils at the site of infection and labeling those cells with a radioactive tracer that can be detected using a gamma camera.

The decision follows a request by the FDA, citing reports of two deaths and 15 additional life-threatening adverse events in patients receiving NeutroSpec. The FDA said all events occurred within minutes of product administration and included shortness of breath, low blood pressure and cardiopulmonary arrest.

During a conference call, Palatin President and CEO Carl Spana said the serious adverse events occurred only in patients with severe underlying cardiopulmonary compromise who received NeutroSpec for off-label uses.

"At no time has a patient receiving NeutroSpec for its approved indication experienced any adverse reaction," he said, adding that the company believed the safety concerns "could potentially be addressed in other ways," such as revising the product's label with additional warnings.

But during a Dec. 15 meeting, the FDA told Palatin that the agency had "reconsidered the risk/benefit assessment" and requested that the product not be administered to any patients pending a review to determine whether a link exists between the use of NeutroSpec and the adverse events, Spana said.

The company's stock (AMEX:PTN) fell 60 cents Monday, or 17.4 percent, to close at $2.85.

The FDA plans to put together an advisory panel early next year to discuss the use of NeutroSpec for equivocal appendicitis, as well as other indications. Palatin has said it intends to investigate the product in osteomyelitis, though all further clinical trials are on hold while the review is ongoing.

Palatin gained approval for NeutroSpec, its first marketed product, in July 2004. It made its commercial launch in September of that year, marketed and distributed by St. Louis-based Tyco Healthcare Mallinckrodt, a business unit of Tyco Healthcare. Palatin covers all the manufacturing costs, and the companies evenly split ongoing development work. (See BioWorld Today, July 7, 2004.)

At this time, Palatin is not speculating on how long the review could take, but the company is confident that NeutroSpec will return to the market.

"We have worked closely with Mallinckrodt on this issue," Spana told BioWorld Today, "and believe that this product will be reintroduced to the marketplace" after the advisory committee meeting, because "the risk/benefit ration is favorable, in our opinion."

In the meantime, the company expects the product's marketing suspension to have minimal effect on finances. Net sales of NeutroSpec in its first year - September 2004 to September 2005 - totaled $9.8 million, with Palatin receiving $2.5 million in royalty payments and another $2.5 million in product transfer sales. For the quarter ending Sept. 30, 2005, NeutroSpec posted net sales of $3.7 million, with $900,000 going to Palatin.

The company had expected the product to bring in revenue of $6.5 million through the end of its fiscal year, June 30, 2006.

While waiting for the advisory panel to convene, Palatin is moving forward with other products in its pipeline, most notably PT-141, its lead therapeutic for treating male and female sexual dysfunction. The company is enrolling patients in four clinical studies, including a large Phase IIb trial in erectile dysfunction. A fifth trial, a Phase IIb study in menopausal women with female sexual disorder, is set to begin soon.

PT-141 is a melanocortin agonist designed to work by a mechanism of action involving the central nervous system, rather than acting directly on the vascular system like phosphodiesterase-5 inhibitors, such as Viagra and Cialis. The drug is being developed jointly with King Pharmaceuticals, of Bristol, Tenn.

In its preclinical pipeline, Palatin has products aimed at obesity, cachexia and congestive heart failure.