By Lisa Seachrist

Washington Editor

Carrington Laboratories Inc. said Friday it would stop development of Aliminase, its drug for the treatment of ulcerative colitis, in light of Phase III clinical results showing the drug had no significant therapeutic effect.

The company's stock (NASDAQ:CARN) lost 48 percent of its value Friday, closing down $3.375 at $3.625.

"We were quite disappointed by the results," said Carlton Turner, president and CEO of Irving, Texas-based Carrington. "We've heard from some patients who are upset because they felt the product was helping them, but in the end you have to go by the [clinical results]. On the up side, we have profitable operations in other areas and we won't be laying people off. In fact, I'll be adding people this year."

Carrington specializes in isolating naturally occurring, biologically active complex carbohydrates from the aloe vera plant. Aliminase, like most of its other drug products, is a purified isolate of a specific size from the plant's assortment of complex carbohydrates. Aliminase has been shown to reduce inflammation in experimental animals.

Turner said the company will continue to develop and conduct preclinical research on new drug leads. However, in the future the company will seek partnerships with pharmaceutical companies to complete clinical testing. Carrington used a contract research organization to conduct the pivotal trial for Aliminase. Turner noted that strategy is one of the reasons there won't be company layoffs.

Preclinically, Carrington is investigating an injectable complex carbohydrate product for the treatment of neutropenia. In addition, the company has a proprietary pectin product it is developing as a drug delivery vehicle.

"Without incurring the expense of the clinical research, we would have produced a profit of $1.875 million in 1999 [net loss for the first three quarters of 1999 was $1.25 million]," Turner said. "We had 19 percent growth last year, and I expect to see growth this year as well. We have profitable operations in aloceuticals, wound care, diabetes and radiation dermatitis and oral mucositis. We're a weird mix."

The company also has a veterinary product, Acemannan Immunostimulant, on the market for the treatment of fibrosarcoma in cats and dogs.