By Kim Coghill

Washington Editor

Roche Holdings Ltd. is expected to make a decision early next year about the future of Valentis Inc.¿s IL-2 GeneMedicine in late-stage head and neck cancer patients following the release of poor Phase IIb test results.

Roche, of Basel, Switzerland, and Valentis, of Burlingame, Calif., are collaborating to develop the synthetic lipid delivery of interleukin-2, a Roche-owned, FDA-approved anticancer agent, as an immunotherapy for head and neck tumors.

Valentis¿ stock (NASDAQ:VLTS) fell 34.9 percent Monday, or $1.43, to close at $2.67.

Back in June, Valentis said interim results from the Phase IIb trial showed a positive trend in the group receiving the drug candidate and chemotherapy vs. those on chemotherapy alone. In fact, early results revealed that disease progression for patients receiving the gene therapy was 129 days vs. 93 days for chemotherapy patients.

Everything looked good until the final data were compiled, Benjamin McGraw, Valentis¿ chairman, president and CEO, told BioWorld Today. ¿When the statistics group entered all the data from all the patients and audited all the data, we lost the positive trend,¿ McGraw said.

¿This product didn¿t work in this indication at this dose. Roche makes the call from here; they own the product. They can stop now or they can change to a different type of tumor.¿

The 80-patient Phase IIb trial was conducted at 14 sites in Germany, the Czech Republic and Russia. Treatments were injected directly into tumors of patients with Stage III and Stage IV carcinoma of the head and neck.

¿The Roche decision was to study this in head and neck cancer, a tumor that is not known to be immunoresponsive,¿ McGraw said. ¿It was a unique decision to try it in this tumor.¿

The failure means Valentis will lose a Phase III milestone, McGraw said. He wouldn¿t discuss financial details except to say the IL-2 program has been paid for and the agreement is worth ¿a great deal of money.¿

Valentis inherited the deal in March 1999 when it was formed by the merger of Megabios Corp., of Burlingame; GeneMedicine Inc., of The Woodlands, Texas, and PolyMASC Pharmaceuticals plc, of London.

McGraw said the poor trial would not impact other products in the Valentis pipeline. Among them is the Del-1 gene for angiogenesis, currently in Phase I/II trials for peripheral arterial disease. The company also intends to submit an investigational new drug application soon for the Del-1 gene in coronary artery disease.

Valentis is studying the VEGF165 gene in patients with peripheral arterial disease. The company incorporates VEGF165 into its lipid delivery system and has shown in a Phase II study that the process can induce angiogenesis in the legs of peripheral arterial disease patients.

In another Roche deal, Valentis suspended a study that combined IL-12 and interferon alpha for melanoma in order to free up resources for the IL-2 study. The companies announced starting the trial again.

Valentis also has an intravenous form of IL-2 (not part of the Roche deal) for lung cancer in Phase I studies. In preclinical development, Valentis is studying a product called MNSOD for the protection of lung tissues, and in other research, the company is studying a gene called TEDF for shutting down blood vessels in cancer indications.

Earlier this year, a 15-month deal between Valentis and Boehringer Ingelheim International GmbH, of Germany, concluded without a product. (See BioWorld Today, Sept. 21, 1999.)

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