BioWorld International Correspondent

SYDNEY, Australia - Fresh from a disastrous series of announcements of major project setbacks that triggered a board shakeout, Amrad Corp. Ltd. declared it will abandon a treatment for hepatitis B after poor results from a Phase IIa trial.

Melbourne-based Amrad Chief Scientific Officer Johnathan Coates said that the lack of antiviral activity in the trial of AM365, involving 23 infected but asymptomatic patients, came as a "complete surprise" to him.

He said the compound did well in laboratory tests and in the gold standard test of trials with American woodchucks, in which the disease is very similar to the human disease. He could not speculate as to why it worked in woodchucks but not in humans.

"We try to make all those guesses before the trial starts," he said. "All I can say is that there must be something in the human liver cells not present in the cells in the laboratory and woodchucks that prevents AM365 from working."

Whatever the reason, investors were not happy with last week's announcement, coming at the end of a string of negative news. They slashed A$0.08 off Amrad's share price to finish at A$0.59 (US$0.32) on Friday.

Both Coates and Amrad Managing Director Sandra Webb emphasized that despite a number of projects having problems in recent months, the company still has a substantial portfolio of development possibilities.

Coates said that this time last year Amrad had four promising compounds in clinical trials. Now it has two: AM336 for the treatment of chronic severe pain (Phase I/II trials completed) based on a compound found in cone snails on the Great Barrier Reef, and Emfilermin for the treatment of reproductive health, partnered with Serono SA (Phase II trials scheduled).

Compounds in preclinical testing include treatments for stroke and cardiovascular disease plus a joint development project with Cambridge Antibody Technology Group plc focused on human antibodies designed to neutralize GM-CSF receptor activity in inflammatory diseases such as rheumatoid arthritis, he said.

The company's research portfolio has been reduced in past months by GlaxoSmithKline plc and DevoCo Pharmaceuticals Ltd., separately deciding to abandon development work on Amrad compounds. Amrad also this year announced negative Phase II results for Emfilermin as a treatment for reducing nerve damage during chemotherapy.

The string of announcements - and a plunging share price - led a major shareholder to challenge the board, resulting in a board shakeup, including the appointment of a new chairman.

Webb said the company's research and development strategy has been under intensive review by the board and the outcome of those deliberations will be reported at the company's annual general meeting in October.

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