By Karen Pihl-Carey

ViroPharma Inc.'s stock took a nosedive Tuesday following the company's release of Phase III pleconaril results, which were not statistically significant in viral respiratory infection (VRI) in adults and viral meningitis (VM) in adults and children.

The stock (NASDAQ:VPHM) closed at $23.25, down $48.50, or about 68 percent.

While data showed the drug did seem to have some benefit in certain patient populations in both indications, it failed to meet primary endpoints.

"We believe these results call into question the commercial viability of pleconaril," Franklin Berger, an analyst with New York-based J.P. Morgan Securities Inc., said in a research note. "Even if the trials can be redesigned with new entry criteria or new endpoints, the overall marginal efficacy demonstrated by this product in several clinical trials, makes it unlikely to be approved by the FDA for non-life- threatening medical conditions, such as colds and viral meningitis."

The company, however, kept a positive outlook on pleconaril, an oral small-molecule drug that specifically inhibits the function of the picornavirus capsid.

"The company plans to aggressively pursue the development of pleconaril for the treatment of picornavirus diseases," said Kori Beer, director of corporate communications at ViroPharma, of Exton, Pa.

Despite ViroPharma's plans to move forward, at least in the picornavirus indication, the news may set the company back on its new drug application (NDA) filings. The company plans to conduct additional studies testing pleconaril in adults with VRI this summer and fall. If results are favorable, an NDA filing likely will occur in the first half of 2001, as planned. But an NDA filing for pleconaril in viral meningitis was expected to occur this year, and likely will be delayed, while the company talks with the FDA about how to move forward.

In the VRI study in adults, the time to resolution of illness, meaning the absence of runny nose and the reduction of other symptoms, was reduced from 9.4 days to 7.7 days in picornavirus-infected patients receiving pleconaril, compared with placebo-treated patients. This was not statistically significant (p=.07), Berger said in his note.

The greatest benefit was seen in patients not taking concomitant cold medications, Beer said. Their illness was reduced from nine days to 6.75 days with pleconaril, which is statistically significant (p=.033).

Other reductions seen were in mucus production as measured by the use of facial tissue (p=.03), as well as sleep disturbances (p=.025). These secondary endpoints also were statistically significant.

"So there's a lot of objective measures that support statistically significant clinical benefit," Beer said. "We're very encouraged by those results and plan to do additional studies."

In his research note, Berger said the trial enrolled 875 patients with VRI, but that only patients with confirmed picornavirus infection - about 45 percent of those enrolled - were included in this primary analysis. "The results of the recently completed Phase III trial demonstrates marginal efficacy at best," he said. "Though statistical significance may be achieved by increasing the number of patients in the trial and limiting the use of concomitant medications, the real-world application of the drug will include concomitant medications and the treatment of non-infected patients."

In the VM study, the primary endpoint was the complete resolution of headache. A significant effect of pleconaril was not observed in all randomized patients, but benefits were seen in adults with the most severe disease, Beer said.

In adults with severe headache and vomiting, the time to complete resolution of headache was reduced by three days (p=.036), as was the time to return to work or school (p=.015).

"So in the most severe patients we did see a statistically significant treatment effect," Beer said. "Based on this information, we plan to have discussions with the FDA to determine our path forward with this program."

Berger said in the research note: "We are skeptical that adjusting the trial design further will have any meaningful effect on the outcome."

Berger also said negative results in the 400-patient trial of pleconaril in children with VM likely will end clinical development of pleconaril in the indication. In the trial, several children showed resolution of headache following lumbar puncture on study day one, but while the illness was shortened from four days to three days in children, a significant effect of pleconaril was not observed, ViroPharma said.

In January 1999, the company reported positive results in a Phase III trial of pleconaril in adult patients with viral meningitis, following negative results the previous November of another Phase III trial of the drug being tested in children with the disease. The preliminary data at that time showed the drug failed to meet the primary endpoint of reduction in headache. (See BioWorld Today, Jan. 7, 1999, p. 1; and Nov. 6, 1998, p. 1.)

In February, ViroPharma announced its plans to offer $100 million of convertible subordinated notes due 2007 to help pay for the commercialization of pleconaril to treat viral meningitis. (See BioWorld Today, Feb. 17, 2000, p. 5.)

J.P. Morgan downgraded the company's stock on Tuesday to market performer and removed its price target of $45 per share.

Aside from pleconaril, ViroPharma also has an unnamed drug in Phase I to treat hepatitis C. That drug is partnered with the Wyeth-Ayerst Research division of American Home Products Corp., of Madison, N.J. The company also has another drug for respiratory syncytial virus that could move into the clinic later this year, Beer said.