Vasogen Inc. reported positive results from a Phase II study of its immune modulation therapies in chronic congestive heart failure.

The study of 73 patients with advanced CHF showed they experienced improvements as measured by hospitalizations and deaths.

“This positions us to move straight to a pivotal Phase III trial,” said David Elsley, Vasogen’s president and CEO.

That would be its second Phase III trial for the therapy. Toronto-based Vasogen has a Phase III trial under way in peripheral arterial disease, for which it expects to have results in 2003.

Elsley said the result of the Phase II in CHF “has a dramatic impact on [Vasogen’s] commercial time frame.” The company previously expected to launch the product in that indication in early 2006 or 2007. Elsley now said he expects that to happen as early as 2005.

Because of what Elsley called “the magnitude of the results,” he said he expects to file with the FDA’s Bureau of Medical Devices by the end of 2004.

The randomized, double-blind, placebo-controlled trial was conducted at cardiac centers in the United States and Canada. The study showed that, compared to placebo, those receiving the immune modulation therapy experienced significantly fewer major events, i.e., hospitalizations or death. The treated group (n=36) had 24 hospitalizations, compared to 41 for the placebo group (n=37), and one death, compared to seven in the placebo group. Vasogen said the single death in the treated group was not considered to be related to cardiac disease, and it occurred in the last month of the six-month treatment period.

Demonstrating a reduction in the rate of major events (hospitalizations and deaths), 12 patients, or 33 percent, in the active treatment group experienced one or more major events during the study, compared to 22 patients, or 59 percent, in the placebo group (p=0.035).

Among the criteria to be included in the study were a New York Heart Association classification of III or IV and a left ventricular ejection fraction of less than 40 percent.

The study also was shown to be both safe and well tolerated, the company said. Because there were no drug interactions, Vasogen said it suggests that the therapy could be prescribed without adjusting or adding to the drugs already being taken by these patients.

Vasogen is studying immune modulation therapies for the treatment of cardiovascular, autoimmune and inflammatory diseases. The company has Phase II trials of the therapy under way in psoriasis, ischemia/reperfusion injury and chronic lymphocytic leukemia.

Immune modulation therapy is delivered during a 20-minute outpatient procedure involving the stressing of a small sample of a patient’s blood using a medical device, followed by the administration of the stressed cells back to the patient. By interacting with the patient’s immune system, macrophages and dendritic cells are triggered by the stressed cells to produce regulatory cytokines. This is intended to lead to a decrease in the level of pro-inflammatory Th1 cells and cytokines, including tumor necrosis factor-alpha, interleukin-6 and interferon-gamma. At the same time, the number of Th2 cells is increased, which leads to increased production of regulatory cytokines. The process of modulating levels of both anti-inflammatory and pro-inflammatory cytokines leads to a decrease in inflammation.

Vasogen’s stock (AMEX:MEW) rose 92 cents Thursday, or 27.06 percent, to close at $4.32.