By Matthew Willett

Corixa Corp. lost about 22 percent of its value Thursday on news that its psoriasis treatment failed to meet the primary endpoint in a 241-patient Phase II trial.

The stock drop and analyst pessimism hit the company in the share price despite indications of efficacy from the trial, which showed PVAC, an immunotherapeutic based on a proprietary process and formulation derived from heat-killed Mycobacterium vaccae, produced a positive response compared to control.

And though the market took umbrage with the results that were announced after market close Wednesday, Corixa CEO Steven Gillis said the trial was a success from the company's standpoint.

"The goal of the study was to emerge with an indication of clinical efficacy at a particular dose, and I think that goal has been met," Gillis told BioWorld Today. "We look forward to using that information for the design of a future study."

Data from the controlled, randomized, 12-week trial showed the intradermal injection to be safe and confirmed the company's Phase I data indicating 15 micrograms was the optimum dosage. Corixa used Candin, a local irritant that produces a hypersensitivity reaction in most patients, as control in the trial.

That dosage "approached statistical significance" (p=0.08) for the study's primary efficacy endpoint compared to control, after administration twice and efficacy assessment measured by decrease in Psoriasis Area and Severity Index (PASI) every three weeks. The efficacy endpoint was at least a 50 percent reduction in PASI score.

Further analysis indicated that those in the optimal dose group who responded with either a 50 percent or a 75 percent reduction in PASI score continued to show benefit with time, reaching their highest reduction levels at the 12-week observation.

The trial's design did not include a later observation point, but the company said a design with an extended observation time could have increased the number of patients found to have reached a 50 percent or better reduction in PASI score. Future trials likely will include a lengthened observation period.

Gillis said that from an efficacy standpoint, the trial met the goals the company set out to evaluate.

"We felt it met the endpoints of a well-run Phase II test and met the goals of a well-controlled and monitored Phase II clinical trial, and we look forward to designing the next study," Gillis said. "We also learned other things about the product along the way that will be helpful in designing the other trial. Some of those things were that the patient response continued to increase over time, and actually patients met their highest levels at the end of the study. That wasn't what we anticipated. Therefore, it might be of benefit to assess efficacy not just at 12 weeks but at other time points as well."

Gillis attributes The Street's response to the news to an analyst downgrade. On Wednesday Prudential Vector Healthcare Group, of New York, dropped Corixa's stock from a "strong buy" to a "hold."

Gillis said the company will now seek "a conversation with the FDA, which is pretty standard at this time." The next trial's design will be the topic, but whether it will be a Phase II trial or a Phase III trial is still unclear.

Gillis said he doesn't expect any delay in the company's timeline for PVAC's submission for marketing approval to the FDA. In fact, he said, the next trial, which Corixa intends to be pivotal in support of regulatory filing, should begin before the end of the year, and, depending on the term of efficacy evaluation, might be completed between a year and a half to two years from now.

And despite the fact that products from Genentech Inc., of South San Francisco, and Biogen Inc., of Cambridge, Mass., are further advanced in clinical testing, Gillis said PVAC has the upper hand.

"Most of those products are far more expensive to manufacture, given multiple times a week, or multiple times a month, and take even longer, in some cases, to demonstrate clinical benefit," he said. "PVAC, at least presently, is just given twice, and it's very inexpensive to manufacture, and it would appear from this study that its effect increases over time."

Corixa's stock (NASDAQ:CRXA) closed at $19.437 Thursday, down $5.375. n