By Kim Coghill

Washington Editor

Alliance Pharmaceutical Corp.'s stock dropped 68 percent after the company said it was stopping enrollment in its Phase III cardiac study with Oxygent due to an imbalance in adverse events, particularly the incidence of stroke.

The frequency of adverse events in the Oxygent (perflubron emulsion) group was in agreement with published data for patients undergoing cardiac bypass; however, the control group frequency was low, causing disparity in the proportion of adverse events between the treatment and control groups, the company said.

"Because of this difference we decided to investigate thoroughly before any decisions are made about the next step," Duane Roth, chairman and CEO of San Diego-based Alliance, said during a conference call Tuesday. "While we are disappointed that we did not complete the trial under the current protocol, we do think that it was the appropriate decision to investigate before proceeding."

Alliance's stock (NASDAQ:ALLP) closed Tuesday at $2.375, down $5.125.

Gwen Rosenberg, Alliance's vice president of communications, said the company has $25 million in cash and will receive two equity payments of $50 million each in March and September from its Oxygent partner, Deerfield, Ill.-based Baxter Healthcare Corp. Alliance licensed manufacturing and sales rights to Baxter last May. (See BioWorld Today, May 15, 2000.)

Alliance has not attributed the adverse events to the use of Oxygent, which has been evaluated in 19 clinical studies involving more than 1,400 subjects. Such events were not apparent in a completed Phase III study with 492 general surgery patients that demonstrated significant reduction and avoidance in blood usage compared to the control population.

The imbalance in the Phase III cardiac study may be confounded by the number of elderly patients with advanced cardiovascular disease, protocol deviations and possible reporting bias related to the single-blind design of the study, according to a statement released by the company.

Oxygent is an intravascular oxygen carrier, or blood substitute, that carries oxygen to tissues through the bloodstream. A perflubron-based emulsion, Oxygent contains no blood products and doesn't perform clotting or immunologic functions.

Fariba Ghodsian, managing director of health care research at Roth Capital Partners Inc. in Los Angeles, said Oxygent is expected to be a significant product, producing $100 million in sales during its second full year.

The suspended study was designed to evaluate the use of Oxygent in conjunction with hemodilution in 600 cardiac surgery patients undergoing coronary artery bypass grafting (CABG) procedures with cardiopulmonary bypass (CPB) support. The study design was based on Phase II CPB studies that did not exhibit similar safety imbalances. Differences between the Phase II and Phase III CPB studies included an increased level of hemodilution and a study population with a higher degree of blood loss.

Agreeing that the adverse events could be attributed to a number of factors, Ghodsian said, "This obviously is disappointing news for the company. They have good safety and efficacy data for general surgery patients and they were actually planning to pull the data both for general surgery and for cardiac, together, and file along with Baxter for regulatory approval. The real question is how this will impact the data for the regular filing for general surgery patients."

In September, Alliance's stock jumped 11 percent to close at $16.88 when the initial data analysis of the Phase III European study of Oxygent showed a statistically significant reduction in the need for donor blood in surgery. (See BioWorld Today, Sept. 12, 2000.)

The study was designed to test the use of Oxygent against standard transfusion therapy. The efficacy data showed the entire population of patients receiving Oxygent during surgery needed fewer units of blood (on average, one unit less; p=0.01). The data also showed the target group in the study - patients requiring 1.5 liters of blood or more - averaged two units less blood needed (p<0.001).

And although she has no immediate timetable as to when the company will complete analysis of the cardiac study data, Rosenberg said Alliance's next step is to determine as quickly as possible why the imbalance exists. Depending upon the answer, the company will move forward accordingly by either modifying the protocol and continuing the study, or halting it.

In the meantime, Ghodsian said she has changed her rating to "hold," until the fate of Oxygent becomes more clear.

Alliance has other products in development including LiquiVent, an intrapulmonary agent for treatment of acute lung injury and acute respiratory distress syndrome, which is being developed under "fast-track" regulations. In mid-December the company said enrollment of 311 patients for a pivotal Phase II/III study was complete.

Imavist (formerly Imagent), an ultrasound contrast agent being developed with Schering AG, of Germany, was the subject of a new drug application submitted in October 1999. In August 2000, Alliance said the FDA completed its review of the NDA for Imavist and found it to be approvable, upon satisfactory response to certain issues identified in the review process.

Alliance's products are intended primarily for use during acute care situations, including surgical, cardiology and respiratory applications.