By Lisa Seachrist

Washington Editor

Xoma Corp.'s stock fell 54 percent Monday on news that a Phase III study testing its lead product, Neuprex, as therapy to prevent infection in patients who have undergone hemorrhagic trauma was stopped early due to "futility."

The company's stock (NASDAQ:XOMA) closed the day at $2.281, down $2.656 a share. In August, the Berkeley, Calif.-based company's stock also took a hit, falling from $7.625 to $4.875, when it announced positive preliminary Phase III results for Neuprex as treatment for acute meningococcemia but declined to offer supporting data. (See BioWorld Today, Aug. 18, 1999, p. 1.)

Monday's announcement came after the data safety and monitoring board for the trauma trial undertook a scheduled interim analysis of 842 of the 1,100 patients already treated in the study, and informed Xoma the trial wouldn't produce statistically significant results if the trial completed enrollment of the planned 1650 patients. Xoma has stopped enrollment but will conduct a complete analysis on data obtained from patients who participated.

"Over the next few months we will analyze all of the patients to understand why this trial failed," said Jack Castello, chairman, president and CEO of Xoma. "We are moving ahead with our plans to file a BLA [biologics license application] for Neuprex in meningococcemia."

Castello noted data from the two previous Phase II trauma studies demonstrated favorable results for the use of Neuprex, particularly in preventing pneumonia and acute respiratory distress syndrome (ARDS) in patients who lost a substantial amount of blood as a result of either blunt force or penetrating trauma. The Phase III study's primary endpoint was a reduction in pneumonia and ARDS in patients treated with Neuprex.

Neuprex is derived from bactericidal/permeability-increasing protein, which is found in white blood cells. The drug works by punching holes in the outer shell of bacteria and killing them. When it binds to endotoxin, it neutralizes its biologic activity as well as accelerating its clearance form the bloodstream. Endotoxins are poisonous molecules produced in the cell walls of gram-negative bacteria that can trigger serious inflammatory complications in infected patients.

Trauma patients who have lost a lot of blood are at particular risk of having the bacteria in their intestines migrate into the bloodstream, where the gram-negative bacteria can cause pneumonia, ARDS, shock, and organ failure.

Castello said the company was on track to submit its BLA for Neuprex in acute meningococcemia - a blood-borne bacterial infection caused by the gram-negative Neisseria meningitidis. Ellen Martin, Xoma's director of corporate communications, said the company is set to meet with FDA in the fourth quarter to review the data for Neuprex in meningococcemia and, based on the outcome of that meeting, could file a BLA shortly after that meeting.

"We've done most of the BLA prep work already," Martin said.

In addition to Neuprex, Xoma, in partnership with South San Francisco-based Genentech Inc. for a humanized antibody engineered to block the CD11a receptor on Tcells in order to inhibit their activation and migration. That product, anti-CD11a or hu1124, will soon be entering Phase II clinical studies in moderate to severe psoriasis and a Phase I study in kidney transplant patients.

Xoma is also developing, with Allergan Inc., a topical BPI in combination with an antibiotic for the treatment of eye infection. The company has Mycoprex, an antifungal peptide, in preclinical development and is searching for development partners.

"We've got a lot going on in addition to Neuprex," Martin said.

Martin said the company has enough cash to hold see it through the first quarter of 2000 at the current burn rate. However, halting the Neuprex trauma study will likely reduce the burn rate significantly.