West Coast Editor

With plans under way for pivotal trials with its oral heparinoid for diabetic neuropathy, KRX-101, Keryx Pharmaceuticals Inc. reported positive interim Phase II results - and watched Wall Street take value back from the stock, which had run up starting in late April.

The news was disclosed Thursday and trading of Keryx's shares (NASDAQ:KERX) was halted after the price dropped 30 cents, to $13.94. Friday, the stock closed down $1.37, or 9.8 percent, to end the day at $12.57. About a week ago, New York-based Keryx was trading near $14.75, as investors grew excited about the impending data, which some may have expected would include "p" values that proved statistical significance - possibly something more in line with the DiNAS trial conducted a few years ago in Europe.

But the trial was not powered for that. The study is testing KRX-101 (sulodexide) gelcaps at two doses, 200 mg and 400 mg, as compared with placebo in patients with diabetic microalbuminuria who are getting an angiotensin converting enzyme (ACE) inhibitor or angiotensin receptor blocker (ARB) as background therapy.

Interim results showed 24 percent of the patients at both doses had therapeutic success, compared with 13 percent on placebo. Therapeutic success is defined in the study as the conversion from microalbuminuria to normoalbuminuria with at least a 25 percent reduction in microalbuminuria or at least a 50 percent reduction in the ratio level of albumin/creatinine ratio level.

Of 149 patients randomized, 120 were considered evaluable. As a result of the positive news, New York-based Keryx is considering the 200-mg dose alone vs. placebo in the pivotal Phase III study, expected to begin this quarter, since there did not appear to be any added benefit with 400 mg over 200 mg.

The 223-patient Phase II DiNAS study in Type I and Type II diabetics with nephropathy were treated for four months with 50 mg, 100 mg and 200 mg per day of KRX-101 and showed dose-dependent reductions in proteinuria. Results, published in the June 2002 issue of the Journal of American Society of Nephrology, also showed the effect of KRX-101 was additive to ACE-inhibitor treatment, suggesting that KRX-101 operates under a different mechanism of action than widely used ACE inhibitors and ARBs.

Jonathan Aschoff, analyst with Brean Murray & Co. in New York and who has a "buy" rating on Keryx, pointed out in a research note that the latest Phase II study was not powered for statistical significance, so the lack of a "p" value should not be surprising - but estimated the "p" value at 0.085, using the results offered.

What's more, Aschoff wrote, the latest Phase II trial to report "was far more rigorous and enrolled patients that were much more resistant to treatment than did the DiNAS trial. Regarding background therapy in DiNAS, ARBs were not yet approved, optimal ACE inhibitor doses were not uniformly given, and some patients were not even taking ACE inhibitors," he noted. "Bottom line, these trials are not very comparable."

Investors might fret over the extra time Keryx will need to enroll more patients in its Phase III and Phase IV programs - the Phase III study will sign up more than eight times as many patients - but the outlook is good, Aschoff believes, since the Phase III trial is using the same endpoint.

About two months ago, Keryx laid out plans for its pivotal program under the special protocol assessment with the FDA. (See BioWorld Today, March 17, 2005.)

Others working in the diabetic nephropathy space include South San Francisco-based Fibrogen Inc., which in February raised $100 million for efforts including its Phase Ib trial in that indication with FG-3019, a fully human monoclonal antibody against connective tissue factor, a fibrosis mediator. (See BioWorld Today, Feb. 17, 2005.)