ProMetic Life Sciences Inc. watched its stock slide 21 percent Thursday on news that its topical gel, recombinant alpha-1-antitrypsin (rAAT), did not reach statistical significance in atopic dermatitis patients.

The stock (TSE:PLI) dropped C26 cents, to close at C98 cents (US77 cents).

The Phase II study conducted in Canada did not achieve its primary or secondary endpoints, while another Phase II study conducted in the UK showed improvement in three out of five patients treated. However, those pediatric patients had a severe dermatological disorder, different from atopic dermatitis.

"This is very encouraging because we're talking about patients in which no treatment is available," said Pierre Laurin, ProMetic's chairman, president and CEO, in a conference call.

Laurin said the company plans to repeat the UK Phase II trial with a larger number of patients with the severe dermatological disorder, about 10 to 15 of them, with the same or an optimized formulation of rAAT. Scientists from Arriva-ProMetic - a joint venture between ProMetic and Alameda, Calif.-based Arriva Pharmaceuticals Inc. - are evaluating whether the negative outcome from the Canadian trial, which involved 36 patients, is related to the formulation. Since the activity of the recombinant version vs. the plasma-derived version almost is equal, Laurin suggested that when a gel dries on the skin, rAAT may get entrapped in the formulation, unlike what happens with a liquid form of the drug.

"This is why we're leaning toward the potential interaction of the formulation here to explain why we wouldn't see a difference between the placebo and the treatment in the atopic dermatitis patients," he said.

Both Phase II trials were placebo controlled and conducted by Arriva-ProMetic. Both showed that the topical gel formulation was well tolerated when applied for up to one month. The five patients in the UK trial received both placebo and rAAT topical gel treatment, serving as their own control. While the atopic dermatitis indication represents a larger market, ProMetic intends to pursue the severe dermatitis indication to get rAAT on the market quicker, Laurin said.

Montreal-based ProMetic does not expect to spend a lot of money on additional trials. The two trials this past year cost about C$500,000.

"Overall, our global therapeutic program on an annual basis is about C$4 million a year," Laurin said. "We have the resources to carry through the alpha-1-antitrypsin program."