News that the HIV drug Reverset needs another Phase II study, delaying pivotal trials, drove Incyte Corp.'s stock down by 41 percent Wednesday.

The Wilmington, Del.-based company met with the FDA earlier this week to discuss Phase II data presented in July at an International AIDS Society conference in Rio de Janeiro, Brazil, as well as its plans to move into two Phase III trials. The agency, though, looking for confirmatory safety and efficacy data, requested another Phase II study.

"We're obviously disappointed and frankly surprised at the FDA's decision," said Paul Friedman, Incyte's president and CEO, in a conference call. "We'll work with them, however, to rapidly come to agreement on how this study should be conducted. And obviously, this has been a cause of delay in our program."

Incyte's management is hopeful that a confirmatory Phase II study could be considered one of two registration trials, a possibility that the FDA seems to support. But even so, the unexpected trial pushes back a market launch, originally expected for early 2008, by 12 to 18 months.

"We're obviously going to do everything we can to make it more like 12, and we're cautiously optimistic that that could happen," Friedman told BioWorld Today.

Incyte's stock (NASDAQ:INCY) plummeted $2.97. Wednesday to close at $4.27.

In their meeting Tuesday, the FDA shared with Incyte its concerns about the Phase II data from Study 203. While it agreed that a 200-mg dose was appropriate to move forward with, it took issue with the subgroup analyses that were unscheduled and post hoc. The agency also said that the number of evaluable patients in the key subgroups were low. The company evaluated 16 patients treated with 200 mg of Reverset who were not receiving 3TC or FTC, compared with 31 patients on 3TC or FTC but not taking Reverset. The analyses indicated that, unlike 3TC or FTC, Reverset has the potential to lower the viral load in treatment-experienced patients, Friedman said.

"That analyses showed what we felt was a convincing advantage for the Reverset-treated patients, but the numbers and the post-hoc nature did not give the FDA the same level of certainty that we have that the results would be reproducible," he said. "We don't feel that's right, but that is their position."

A third sticking point for the FDA was the 5 percent rate of hyperlipasemia seen in patients receiving 200 mg of Reverset. The previous Phase II study found that half of patients receiving 200 mg of Reverset with ddl (didanosine) experienced asymptomatic increases in serum lipase, and the company concluded that Reverset should not be used with ddl.

But for those patients not receiving ddl, hyperlipasemia at the Grade IV level was seen in two out of 37 patients receiving 200 mg of Reverset and two out of 34 patients receiving 100 mg of drug.

The agency is not so much concerned with hyperlipasemia as it is with the potential risk of clinical pancreatitis. Study 901, an ongoing extension of Study 203, has uncovered no cases of clinical pancreatitis in patients more than a year since their treatment began, Friedman noted.

Like the FDA, Incyte's investors seemed less than enthused in July, when the Phase II data were presented at the IAS meeting.

The company's stock dropped more than 15 percent that day, even though results in 199 patients showed Reverset had a significant antiviral benefit. Specifically, patients treated with the drug displayed a 54 percent response rate, compared with a 40 percent rate seen in placebo patients. (See BioWorld Today, July 26, 2005.)

Reverset is an oral, once-a-day nucleoside analogue reverse transcriptase inhibitor. Incyte gained exclusive U.S. and European rights to it through a September 2003 licensing agreement with Atlanta-based Pharmasset Inc.

About a week ago, Incyte met with members of its Reverset advisory board, all physician experts, and nobody alerted the company that the FDA might request another Phase II trial.

"We found pretty much uniform enthusiasm for the data and support for moving into Phase III," Friedman said. "People felt that the subanalysis was a compelling one and that the hyperlipasemia was something that had to be monitored, but was manageable, which was our view."

Incyte could start the Phase II trial before the end of the year. It likely will include about 200 patients, with 100 in each arm of a head-to-head comparison of Reverset and 3TC (Epivir; lamivudine) on top of optimized background therapy. While the company will discuss the final design with the FDA, a six-month endpoint probably would compare the percent of patients with greater than a 1 log viral load drop, and a secondary endpoint would measure the percentage of patients who have undetectable levels.

London-based GlaxoSmithKline plc's 3TC often is the first regimen for patients. When patients fail the first regimen, they generate the M184V mutations. In highly treatment-experienced patients, clinicians reintroduce 3TC or FTC (Emtriva), from Foster City, Calif.-based Gilead Sciences Inc., as a way to maintain the M184V mutation because it does not replicate as quickly as the wild-type virus. That is where Reverset might show the greatest benefit, because it has demonstrated its ability to be effective in reducing viral load in patients resistant to other nucleoside analogue reverse transcriptase inhibitors.

About 85 percent of all HIV patients are treatment-experienced, Friedman said.

"We have said that we thought peak sales could be somewhere between $200 million and $500 million, depending on how compelling the pivotal trials are," he added. "If we get this approved, that's still the range."

Currently, Incyte has enough cash to take it through the end of 2007, and would need to raise capital before launching Reverset. As of June 30, its cash and marketable securities balance totaled about $401.4 million.

Aside from Reverset, Incyte is studying INCB3284, its oral CCR2 antagonist, in one-month Phase IIa trials for rheumatoid arthritis and for obese insulin-resistant subjects. The company expects data by the end of this year and to start six-month studies early in 2006 for RA and multiple sclerosis. The drug also is being developed for atherosclerosis.

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