By Randall Osborne

West Coast Editor

As marketing approval nears for Campath, its leukemia drug, Ilex Oncology Inc. aims to boost discovery efforts through its buyout of Symphar SA, a Geneva, Switzerland-based medicinal chemistry company, for $30 million in equal amounts of cash and stock.

But shares of Ilex (NASDAQ:ILXO) fell 20 percent Wednesday, when the San Antonio-based firm said in its earnings report that an FDA decision on Campath may be delayed 60 days.

In the report, Ilex said it expects to hear from the agency by Feb. 20, in the form of either approval or a "Class I complete response" letter, which would extend finalization of Campath's package insert and a required post-approval trial.

Research analyst Jason Zhang, of Stephens Inc. in Little Rock, Ark., said the Class I complete response letter is "another great innovation of the FDA. It means, 'We have not finished your work, so we're going to give you a letter.' People always overreact to this type of news."

The stock closed at $21.375, down $5.312, after dropping as low as $19.937.

Late last year, the FDA's Oncologic Drugs Advisory Committee (ODAC) recommended approval of Campath, a monoclonal antibody for patients with chronic lymphocytic leukemia (CLL) who have been treated with alkylating agents and who have failed fludarabine therapy. (See BioWorld Today, Dec. 15, 2000.)

Jill Scoggins, director of public relations for Ilex, said the FDA is "facing some real workload issues. That's a lot of the reason why this is happening. But we're so close [to approval], you can hardly see daylight."

She cited a survey that found backlogged FDA's approval time jumped from 12.5 months in 1999 to 17.5 months in 2000. A design for the post-approval trial was submitted "just before we went to ODAC," Scoggins told BioWorld Today.

Campath is being developed in a 50-50 joint venture between Ilex and Cambridge, Mass.-based Millennium Pharmaceuticals Inc., which acquired its rights to Campath through its December 1999 acquisition of LeukoSite Inc., also of Cambridge. Richmond, Calif.-based Berlex Laboratories, a division of Berlin-based Schering AG, will distribute and market Campath. (See BioWorld Today, Aug. 25, 1999, and Dec. 27, 1999.)

Symphar and Ilex have worked together since 1998 in the development of Apomine, an oral bisphosphonate ester now in a Phase II trial for prostate cancer, with more planned in lung and breast cancer, plus melanoma and leukemia, later this year.

The Swiss firm is focused on regulating the gene expression by modulating the activity of certain nuclear receptors, such as the Farnesoid X Receptor, which control cellular functions such as apoptosis and the metabolism of lipids and calcium.

"We're not consolidating or downsizing [as part of the acquisition]," Scoggins said, and Symphar's 30 employees will remain at the Geneva site, and Ilex will take a charge this quarter of $15 million.

"We've been very good on the drug development side, but we're looking to do something in the drug discovery and the translational side," she added, and Symphar seemed right for those efforts.

In 2001, Ilex plans to complete accrual of a Phase III trial of eflornithine for superficial bladder cancer, and start another of the drug in combination with celecoxib in patients with familial adenomatus polyposis.

Also to finish accrual is the pivotal trial of Oxyprim, for gout in patients who cannot tolerate allopurinol, and Ilex will begin Phase II trials of ILX23-7553, its vitamin D3 analogue, as well as other studies. Of the 23 trials under way or starting, three are Phase III or pivotal Phase II trials, five are Phase II trials and 15 are Phase I trials, the company said.

As of Dec. 31, Ilex had $202.8 million in cash and cash equivalents. Net loss for the quarter was $7.9 million (excluding $14.6 million of in-process research and development), or 31 cents per share, compared to a net loss of $2.8 million, or 15 cents per share, in the fourth quarter of 1999.

Zhang told BioWorld Today the hit taken by Ilex's stock also has to do with the firm's effort to "transition out of the [contract research organization] business, so that revenue will decrease by about $14 million this year. At the same time, they're going to increase the research and development spending quite a bit. Breaking even has been pushed farther into the future. We're looking at about 2003." n