Xcyte Therapies Inc. is discontinuing plans for a pivotal trial of its Xcellerated T Cells in chronic lymphocytic lymphoma (CLL), as it shifts the focus of its lead product from cancer to HIV.

Though the move was made partly in an effort to conserve the company's existing resources in a difficult market, the primary reason stemmed from Xcyte's inability to reach an agreement with the FDA regarding the path for regulatory approval, said Robert Kirkman, chief business officer and vice president of Xcyte.

"We'd been in discussions with [the FDA] since last September about the design of our Phase II/III trial in CLL," he said, adding that Xcyte had proposed a trial design with patients who had received Campath (alemtuzumab, Genzyme Corp.), with a primary endpoint focused on response.

But the FDA "continued to be interested in a larger, randomized trial with a different endpoint, probably survival," Kirkman told BioWorld Today, "and we don't think that's a feasible or affordable trial in that patient population."

The Seattle-based company announced earlier this year that it would not go forward as planned with late-stage trials of Xcellerated T Cells in multiple myeloma and non-Hodgkin's lymphoma, after data from Phase II studies failed to show significant antitumor effects. But in the CLL indication, Xcyte had reported promising results - at least promising enough to prompt a 24 percent reduction in the company's work force in March to ensure adequate funds for conducting the pivotal trial.

"We're as disappointed as anybody about this," Kirkman said. Data from earlier studies "clearly showed some significant effects of the therapy in patients, in terms of shrinking the size of their tumors and lymph nodes."

But, he said, the pivotal trial would require Xcyte to raise additional funds, and generating interest in the present market would be especially difficult without the FDA's blessing on the company's regulatory strategy.

"This is not to say that, at some point in the future, we wouldn't like to continue to work in oncology," Kirkman said. "But the reality is, we need to do something that will allow us to get to the next milestone" without having to raise more money.

HIV seems to be the most obvious target for the company's Xcellerate technology, which uses a patient's own immune system to derive products from T cells to create immune responses, detecting and eliminating infected cells. The Xcellerate technology is designed to activate and expand the number of T cells outside the body, and then those Xcellerated T Cells are administered to the patient.

Several trials using Xcyte's technology in HIV have shown that it's possible to elevate CD4+ T-cell counts in patients with HIV, and, in a small percentage of the cases, even lower viral load, Kirkman said.

The aim of the clinical HIV program is threefold. Trials will determine whether the Xcellerated T Cells can increase a patient's CD4+ T-cell counts, decrease viral loads in patients with detectable viral loads and act effectively enough to give patients a "holiday period" from the complicated regimens and side effects associated with antiretroviral cocktails, Kirkman said.

Preclinical studies have demonstrated that monkeys receiving the expanded and activated T cells can be temporarily taken off antiretroviral therapy for substantial periods of time. Kirkman said. "If you can give patients a holiday from those drugs, that is a substantial benefit."

Xcyte plans to file an investigational new drug application in HIV this summer and to begin the first trial before the end of the year.

Kirkman said Xcyte is the only company developing unmodified T cells, though there are other companies working on gene-modified versions, including a European company using Xcyte's technology. Fresenius Biotech GmbH, a division of Fresenius AG, of Bad Homburg, Germany, licensed the Xcellerate technology for its T-cell-based gene-therapy program in HIV. The license covers Europe only, and Xcyte is entitled to milestone and royalty payments.

Xcyte reported a net loss of $7.3 million, or 37 cents per share, for the first quarter, and posted revenues totaling $16,000. As of March 31, the company had $39.5 million in cash, cash equivalents and short-term investments.

Shares of Xcyte (NASDAQ:XCYT) lost 15 cents Monday, or 17.7 percent, to close at 70 cents.