By Brady Huggett

IntraBiotics Pharmaceuticals Inc. said preliminary results of its first completed Phase III trial of its product, Protegrin IB-367 Rinse, for the prevention of oral mucositis in patients undergoing high-dose chemotherapy for the treatment of cancer, did not meet its primary endpoint of reducing ulceration.

The trial was complicated due to a dosing error by a third-party vendor during the trial, information that was released by the company in January. The error caused 102 patients to receive at least one incorrect treatment, either placebo or drug, and basically split the trial size into two populations.

Kenneth Kelley, chairman and CEO of IntraBiotics, said the error cost IntraBiotics what he believes would have been a successful Phase III.

¿[Without the error,] we believe we would have hit statistical significance in primary and secondary endpoints,¿ he said. ¿There is no doubt in our mind there is a drug here.¿

Eric Schmidt, analyst for SG Cowen Securities Inc., of New York, said news of the missed endpoint is simply another blow, but not a killer.

¿From the stock price going into the trial, it¿s clear the expectations were pretty low,¿ he said. ¿The damage had already been done to IntraBiotics. Is it a knockout blow to the company? No. They will live to see another day. But it removes one near-term trigger that could have brought their stock right back up.¿

IntraBiotics¿ stock (NASDAQ:IBPI) fell 61 cents Thursday, or about 20 percent, to close at $2.40. It has traded as high as $33 in the past year, and has been at $10 in 2001. It saw a 33 percent stock drop in March, after news that its Phase III Ramoplanin Oral trial would be delayed a year or more. (See BioWorld Today, March 13, 2001.)

¿Out stock has been down 80 percent this year,¿ Kelley said. ¿We are in the same trading zone today that we have been in for the past two weeks.¿

While the trial missed the primary endpoint, it did hit the secondary endpoint of reducing pain in the intent-to-treat group.

The vendor error was caused by a program glitch, Kelley said.

¿The problem was a freak accident,¿ he said. ¿In our experience, we had never seen this occur before. A computer programmer failed to delete a dummy set of variables for kit numbers. The computer program told the physician to grab the wrong box.

¿It was unlucky, but it happened,¿ he continued. ¿It was a fluke occurrence, but we fixed the problem. The programmer put a control process in place and so did we.¿

The trial enrolled 323 patients. However, once the error tainted 102 patients, the properly treated patients dwindled to 221 patients. The study showed a 30 percent increase in patients that did not experience oral ulcers while undergoing chemotherapy (p=0.06) for the 323 patient sample. Of the 221 properly treated patients, a 30 percent increase was also seen, but the p-value was 0.11.

The intent-to-treat group had a 19 percent decrease in peak pain (p<0.05) and the properly treated group had a 21 percent decrease (p=0.13). Results showed Protegrin IB-367 was well tolerated and adverse side effect rates were comparable to placebo.

IntraBiotics has a second Phase III for Protegrin under way for patients receiving radiotherapy and has enrolled 162 of the planned 500 patients. Data from the study is expected in the second quarter of 2002.

The error and the failed Phase III leave IntraBiotics with at least three options, Kelley said, although which route the company would choose remains to be seen.

¿One possibility may be to file on these two Phase III studies, based on the radiotherapy results,¿ Kelley said. ¿We could tie the Phase II results in chemotherapy and the Phase III in chemotherapy. One [option] may be to repeat the Phase III in chemotherapy, and we could file on those results. Or we could use this to support a more narrow radiotherapy claim. So, we have these three strategies and many strategies in between.¿

Schmidt said the results showed some positive trends, and agreed that the company has several moves it could make, but stressed the importance of letting investors know what will occur next.

¿No one can blame them for not knowing, because they just got these results,¿ he said. ¿But that is one thing that could help them: providing more clarity going forward and what their strategy is.¿