After to a split advisory committee vote last month on Chiron Corp.'s Pulminiq, the FDA issued an approvable letter but asked for another study to confirm efficacy of the lung transplant drug.

Emeryville, Calif.-based Chiron is seeking approval of Pulminiq, an inhaled cyclosporine, to increase survival and prevent chronic rejection, in combination with standard immunosuppressive therapy, in patients receiving allogeneic lung transplants based on data from one Phase II trial. Due to the fact that cyclosporine is already on the market, and because lung transplant is an orphan indication, the company believed the data was sufficient.

"The incredible survival benefit that was demonstrated by the data was why we chose to move forward," said Richard Tate, Chiron's spokesman. "We understood there would be regulatory challenges with a small, single study."

Those challenges were laid out in June, when the FDA's Pulmonary-Allergy Drugs Advisory Committee voted 8-8 on the drug, with those dissenting citing concerns over the small size of the pivotal trial and a missed primary endpoint of decreasing death from acute rejection.

But the committee also took note of the 79 percent decrease in the risk of death and a 72 percent decrease in the risk of chronic rejection or death seen in patients taking Pulminiq. They supported Pulminiq as safe, voting 11-5 in favor of the drug, and casting more ambiguity on what the FDA's actual decision might be. (See BioWorld Today, June 7, 2005.)

The answer came after the market closed Thursday, and was announced by Chiron Friday morning. Chiron's stock (NASDAQ:CHIR) dropped $1.24 Friday to close at $36.03.

Chiron filed its new drug application for Pulminiq in October. The Phase II trial in the NDA enrolled 26 patients who received the product, all with allogeneic lung transplants and only a 50 percent chance of survival after five years. The study was conducted at the University of Pittsburgh over a five-year period of enrollment and follow-up. (See BioWorld Today, Oct. 15, 2004.)

The trial showed that 14 placebo-treated patients died prior to the study closure, compared with three treated with Pulminiq.

At the time of the FDA advisory committee meeting, Chiron said it would conduct an open-label post-approval study up to 10 times larger than the Phase II trial to confirm the results. But the agency now has ruled that a prospective, randomized study confirming efficacy must occur before final approval, and Chiron is deciding whether it will do it.

"We will have to consider all of our options," Tate said, "and decide what the next steps will be."

The study would help Chiron to establish a carcinogenic profile of long-term immunosuppressive therapy with Pulminiq, another concern brought to light by the FDA advisory committee.

Analysts have had little reaction to Pulminiq, calling it a niche product and not a big source of revenue. The company has said Pulminiq could generate between $40 million and $70 million worldwide each year. Chiron received orphan drug designation from the FDA in 2003.

Thomas Shrader, an analyst with New York-based Harris Nesbitt Corp., said in a research note that the FDA's requirement for a new trial was not surprising considering Pulminiq's "lukewarm reception" at the advisory committee meeting in June. He also pointed out that Chiron hesitated at the meeting over whether it would "find it prudent to commit resources for a large confirmatory trial."

"One possible outcome," Shrader said, "is the sale of rights to Pulminiq to another company."

In the U.S., there are about 1,100 lung transplants performed each year, and only about half of patients live for five years after the transplant. Lung transplants are rejected more than heart, kidney and liver transplants, possibly because the lung is more exposed to the environment and current drugs are not as effective as they are with other organ transplants.

Pulminiq contains 300mg/4.8 mL cyclosporine, and is inhaled directly to the lungs, providing a greater concentration at the rejection site than intravenous or oral cyclosporine, which is used to treat chronic rejection of kidney, liver and heart allogeneic transplants.

Chiron acquired exclusive worldwide commercial rights to Pulminiq in 2003 from Novartis Pharma AG, of Basel, Switzerland. (See BioWorld Today, April 23, 2003.)

If Pulminiq receives final approval, Chiron plans to market the drug itself, using its TOBI sales force. TOBI, an inhalable tobramycin solution for cystic fibrosis patients chronically infected with Pseudomonas aeruginosa, had sales of $51 million for the quarter ended June 30.

"A large portion of lung transplant patients are cystic fibrosis patients," Tate said. "There's a great deal of overlap between those populations. Our sales force already has a presence in some of the centers where lung transplants occur."

Other leading causes of lung transplantation are emphysema, pulmonary fibrosis and pulmonary hypertension.

Begrivac Supply Down; FDA Inspects At Liverpool

Separately, Chiron released two bits of news regarding flu vaccine manufacturing issues. Due to a small number of lots of the Begrivac vaccine that did not meet product sterility specifications, the company has reduced its supply expectations to about 4 million doses and it might delay shipments until early October.

The vaccine is manufactured at the company's facility in Marburg, Germany, and is supplied to the German and UK markets. Chiron had expected to supply those countries with about 12 million doses of Begrivac.

"The contamination of the flu vaccine plant in Germany is unsettlingly familiar," Shrader stated in his note.

Chiron failed to supply any flu vaccine last year to the U.S. market, when European authorities, citing sterility issues, suspended the company's license to manufacture Fluvirin in the Liverpool, UK, facility, the only one authorized to supply the vaccine to the U.S. Chiron had expected to supply between 46 million and 48 million doses to the U.S. (See BioWorld Today, Oct. 6, 2004.)

Shrader speculated that Chiron now is realizing that it has misunderstood cGMP (current Good Manufacturing Practices) standards, and perhaps that is why the company found the problems at the Marburg facility.

As for Chiron's Liverpool facility, the FDA is currently conducting a full cGMP inspection. Assuming the company does not encounter any further issues regarding the manufacturing facility, it will produce 18 to 26 million doses of Fluvirin for the 2005-2006 flu season, with most of the supply going to the U.S.

Chiron does not expect to record any sales of Begrivac vaccine in the third quarter, although it does expect to be within the range of its updated 2005 financial guidance of between $1.20 and $1.45 per share on a pro-forma basis and between 86 cents and $1.11 per share on a GAAP basis in terms of income from continuing operations.

But Shrader said a press release Thursday from Novartis signals a negative for Chiron's second-quarter earnings expected on July 27. Novartis reported an equity loss of about $13 million in the quarter for its 42 percent equity stake in Chiron.

"Overall, we believe the Chiron story continues to be risky," Shrader said, "with the potential for more negative news flow over the next few weeks without equivalent upside potential."

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