By Randall Osborne

West Coast Editor

High hopes for transplanting pig brain cells to Parkinson's disease patients sank with disappointing early data from a Phase II trial, and so did the stock of Diacrin Inc. (NASDAQ:DCRN), which lost 39 percent Friday, closing at $2.875, down $1.812.

Although all patients got somewhat better, preliminary data showed no difference in improvement between those treated with Neurocell-PD and those in the control group.

Thomas Fraser, president and CEO of Charlestown, Mass.-based Diacrin, said more details won't be available until July. Diacrin and its partner, Genzyme General, of Cambridge, Mass., have yet to decide whether to go ahead with a Phase III study.

"That would have been a confirmatory trial," Fraser told BioWorld Today. "We need to understand the basis for the patients we did see improve, and see if we can prospectively identify patients who might benefit."

The Phase II study was small - 18 patients at three medical centers - but should have been enough to notice favorable results, he added.

"It's a pretty involved procedure, so recruiting patients was relatively slow going," Fraser said. Researchers had been encouraged by Phase I results, he said, and in the Phase II study, "we put in four times the number of cells, but we didn't see the kind of increase in consistency that we had hoped."

Each of 10 patients in the treatment group was given about 48 million cells, transplanted on both sides of the brain, along with cyclosporine to suppress immunity and block rejection. Subjects were evaluated at baseline and at three-month intervals at least 18 months after surgery .

The primary endpoint was the difference between treated patients and control-group patients in total score on the Unified Parkinson's Disease Rating Scale, as applied more than 12 hours since the last medication and 18 months after surgery. That's where no difference was seen.

Bo Piela, spokesman for Genzyme, said "positive trends in certain patients who were identified as responders" will be examined more closely.

"We just unblinded the stuff this week, within the past few days," he told BioWorld Today. But it's clear that Neurocell-PD won't enter a Phase III study by June 30, Piela said, which means Genzyme Biosurgery (a division of Genzyme General) must give back a $20 million milestone payment that was contingent on the trial starting at that time.

In April 1999, Genzyme Corp. transferred its 50 percent interest in the NeuroCell joint venture with Diacrin to Genzyme General from Genzyme Tissue Repair, which is now part of Genzyme Biosurgery. Genzyme Tissue Repair got $25 million from Genzyme General, of which $5 million was nonrefundable.

The rest, to be repaid in Genzyme Biosurgery shares or cash, along with interest that Piela said is "not a whopping amount," will be distributed to Genzyme General shareholders.

"We move it around," Piela said, noting that the impact of the Phase II preliminary findings on Genzyme is minor.

"It's not one of our late-stage programs," he said, "and we're expecting approval this year for Fabrazyme [agalsidase beta]," Genzyme's enzyme replacement product for Fabry disease.

Genzyme Biosurgery's stock (NASDAQ:GZBX) closed Friday at $6.968, down 15.62 cents. Genzyme General's shares (NASDAQ:GENZ) ended the day at $85.062, down $3.687. n