By Brady Huggett

MacroChem Corp. didn¿t hit all its endpoints in its Topiglan for erectile dysfunction Phase III trial, discovered a dosing problem in the study and then watched as its stock nearly halved on the news. It also stiffened its resolve to get the product to market.

The company released the news before completion of the entire analysis for the trial, saying it wanted to make public the trends it discovered.

¿The two endpoints that we were working with were, one, could we achieve statistical significance with men achieving erection, and we did hit that one,¿ said Bernie Patriacca, chief financial officer at MacroChem. ¿Two, in terms of maintaining an erection through completion of intercourse, we did not hit that.¿

MacroChem¿s stock (NASDAQ:MCHM) was cut $2.90 Thursday, or about 47 percent, ending the day at $3.25.

While the botched dosing, the missed endpoint and the distancing of an FDA filing combined to deflate MacroChem¿s stock, Patriacca said there are positives to be taken from the trial.

¿One is the fact that for the first time in an in-home setting, we proved that SEPA works,¿ he said. ¿And that is a huge event. The other positive is that despite the under-dosing, we were still able to achieve statistical significance in men achieving erection.¿

SEPA is MacroChem¿s transdermal drug delivery technology; it is used not only in Topiglan, but also in the company¿s dermatology program, hormone replacement therapies and pain-management platform.

Topiglan is a topical gel containing 1 percent alprostadil, a synthetic version of a hormone found naturally in human semen, and 5 percent SEPA. Topiglan is applied to the head of the penis prior to intercourse. Side effects seen have been mainly slight burning or stinging sensations, also noted in Phase I and Phase II trials. Patriacca said the company is working on a reformulation with smaller amounts of alcohol that should reduce the problem.

Patriacca said the trial bore the burden of having particularly tough patients to treat.

¿They were difficult patients,¿ he said. ¿Our average [International Index of Erectile Function] erectile-function domain score ¿ what it does is rate individuals as to their severity of ED, with 1 being the worst ¿ was a 9 [on a scale of 30]. We had some severe cases, but the thing we took away from it was that with these individuals we still achieved statistical significance for men achieving erection.¿

The dosing glitch had less to do with the product and more to do with the package, Patriacca said. Topiglan was doled out to patients in a dispenser that contained a set amount of the drug ¿ what is considered the proper portion needed for a man to achieve an erection. However, not all patients received everything the dispenser had to give.

¿It appears that SEPA was interacting with the dispenser,¿ Patriacca said. ¿All the dispensers that were used were filled sometime in 2000, and the drug did interact with the dispensers. [Patients] didn¿t feel that all the drug that was in the dispenser was coming out, and we tested that and found that that was true.

¿But in the meantime, our manufacturer was already working on a new blister pack,¿ he added. ¿You break it, you have it in your hand and that way you can see it.¿

With the dispensing problem seemingly fixed, Lexington, Mass.-based MacroChem can focus on getting Topiglan back into a Phase III trial.

The company said it now expects Topligan to be marketed in 2004. ¿This does push it back somewhat,¿ Patriacca said. ¿We will meet with the FDA to set up a protocol for a Phase III going forward and we will charge headlong into that and do it as quick as we can.¿

Of the tough day on the market, Patriacca said he¿d gotten ¿more positive calls than negative,¿ but said he ¿couldn¿t determine what the people on the market are doing.¿

¿We¿re still confident,¿ he added. ¿We will be meeting with the FDA and moving ahead with it. We are more confident now than we were before because we validated that SEPA does work.¿