Rising from the ashes of a new drug application withdrawal, Cellegy Pharmaceuticals Inc. is resurrecting the development of Cellegesic, its drug for chronic anal fissures.

In April, Cellegy withdrew its NDA after the FDA advised it that approval was unlikely, causing the company's stock to plummet more than 50 percent on the day the news was released.

But following a series of meetings with the FDA, South San Francisco-based Cellegy is progressing with an additional Phase III trial in an attempt to obtain approval for the nitroglycerin ointment designed to treat pain caused by chronic anal fissures. The trial is structured to test the significant pain reduction achieved by the product in two previous large, randomized Phase III trials.

Cellegy said the new trial is designed to satisfy FDA concerns regarding statistical analysis.

"There was some unclarity with the FDA, which we think has been resolved now," Cellegy Chief Financial Officer Richard Juelis said. "So we're down to one issue - the statistical analysis methodology. And even there, we resolved how to handle that going forward."

The NDA withdrawal was based on several issues, a significant one being the amount of anal fissure pain reduction patients received vs. the headaches some experienced. About 50 percent of patients developed headaches, though only 5 percent dropped out of the trial. (See BioWorld Today, April 29, 2002.)

"It's a well-known side effect that nitroglycerin can cause headache," Juelis said. "The agency raised the issue of the relative risk/benefit of headache pain vs. the relief of anal fissure pain - the trade-off of the two. And in fact, the headache pain was relatively mild to moderate and subsides in most patients after a short period of time."

With such questions now in the background, Cellegy is continuing with what it hopes is Cellegesic's final pivotal trial. The protocol design and statistical methodology will be submitted to the FDA for review and final concurrence.

"We're pretty optimistic we can do a relatively smaller, relatively faster trial with a high probability of success," Juelis said. "We're feeling good about the product clarity and will hopefully move forward from here."

He said the study would likely enroll between 120 and 150 patients and could be completed by the end of 2003.

"We believe that a resubmission could be reviewed within a six-month period of time, so arguably we could be approved in the first half of 2004," Juelis added.

The double-blind, randomized study will enroll subjects suffering from pain due to chronic anal fissures into a four-week treatment period with either Cellegesic ointment or placebo. The primary endpoint will be reduction of pain measured by a visual analogue scale to determine if the active drug provides significantly more pain relief than placebo, the same technique used in previous trials.

Three years ago, Cellegesic failed to meet its primary endpoint of completely healing anal fissures, but it reached its secondary pain reduction endpoint. Last year's NDA was based on statistical pain relief findings from a pair of Phase III studies. (See BioWorld Today, June 27, 2001.)

Cellegy said it expects the trial to cost between $1.5 million and $2 million, an amount Juelis said is factored into the company's current burn rate of $900,000 per month. As of June 30, Cellegy's cash reserves totaled $8.4 million.

"We think within our current budget constraints we can progress with this trial," Juelis said. "Of course we're looking at out-license opportunities for our Tostrex product and some of our other products. We expect that will bring in some funding."

The company submitted in early June an NDA for Tostrex (testosterone gel), to treat male hypogonadism. Accepted for review following the 60-day period, Tostrex is the subject of partnerships for European licensing rights as well as for co-promotion rights in the U.S.

Tostrelle, a transdermal testosterone gel to treat female sexual dysfunction due to testosterone deficiency, entered Phase II/III testing during the first quarter. Other pipeline products include nitric oxide donors for the treatment of Raynaud's disease and prostate cancer, as well as products for the treatment of male erectile dysfunction.

Cellegy's stock (NASDAQ:CLGY) fell 25 cents Monday to close at $2.15.