By Mary Welch

Diatide Inc. received FDA approval to market NeoTect for the imaging of suspected malignant lung tumors, prompting a $2 million milestone payment from its partner, Nycomed Amersham plc.

"Absolutely we're pleased," said Richard Dean, Diatide's president and chief executive officer. "It now will be our second revenue generator and our second FDA approval in a little less than a year."

The stock market rallied around the news, propelling the company's shares (NASDAQ:DITI) up 10 percent, closing Wednesday at $6.75, up 62.5 cents.

NeoTect is a small synthetic peptide combined with technetium-99m. When injected into the patient, the peptide attaches itself to the somatostatin receptor on the tumor. Two hours later, the patient is scanned with a gamma camera, which can pick up the gamma signal emitted by the technetium.

The approval was based partly on two Phase III multicenter trials that involved a total of 270 patients. Overall, the tests showed that NeoTect could identify a lung cancer nodule in almost 97 percent of all cases. (See BioWorld Today, June 7, 1999, p. 1.)

The trial consisted of two subsets. One subset of 114 had suspected solitary pulmonary nodules (SPNs); those in the other group had several tumors or a metastasis.

The trial showed NeoTect identified a malignant tumor in 96.6 percent of all cases in the SPN group with a specificity of 73 percent, meaning that of all the spots lighted up, 73 percent were cancerous. The others pointed to infections or other problems.

In the non-SPN group, statistically significant results were found, although the Londonderry, N.H., company hasn't released the data.

The company expects the product to be available in about a month.

"We believe that NeoTect will be an easier sell than AcuTect," Dean said. "AcuTect is aimed at the cardiovascular market and NeoTect is for oncology. Those in the oncology fields are generally in big medical centers and more likely to get it and use it. Plus, nuclear medicine and radiology are already in a strong position in the oncology field."

Estimates for the NeoTect market range from $50 million to $100, he said.

AcuTect was approved in September 1998 and was launched the next month for the imaging of acute deep vein thrombosis (blood clots) in the legs. AcuTect posted first-quarter 1999 net sales of $293,809, and projections for the second quarter show sales will increase by about 25 percent. (See BioWorld Today, Sept. 16, 1998, p. 1.)

The FDA did ask if the company was willing to conduct Phase IV tests. "We said 'yes,'" Dean said. "It was really reasonable so we readily agreed to it."

The FDA wants additional information on any drug impurities, the structure of the product, the validity of one assay and the optimal temperature for labeling. In addition, it wants trials done with three patient populations not included in the original studies - geriatric and those with compromised livers and kidneys.

"These type of issues are standard for imaging agents and relatively straightforward," Dean said. "We have until the end of the year to respond to the chemistry stuff and the end of 2000 for the clinical trials."

The next company milestone will be the filing of an investigational new drug (IND) application for Theratide, a therapeutic agent to treat lung and breast cancer. Theratide consists of a targeting peptide similar to that in NeoTect but labeled with the therapeutic beta-emitting radioisotope, rhenium-188. The company expects to file the IND and start Phase I by year's end.

"We will start clinical trials and at the same time we will be paying substantial attention to our discussions about licensing our unpartnered compounds, like Theratide. There are a number of companies interested in helping fund our program," Dean said.

Diatide's partner, London-based Nycomed Amersham, pulled back some from their 1995 collaboration, terminating its option to develop additional Diatide products. The original deal called for the two companies to co-promote Diatide's Techtides medical imaging products in the U.S., and for Nycomed to be the licensee of those technologies in Europe as well as in South Africa and parts of the Middle East. In addition, Nycomed had the option to develop further products. It now is involved only with the two approved products, AcuTect and NeoTect. (See BioWorld Today, Aug. 12, 1998, p. 1.)

To date, Diatide has received about $25 million from its partner, Dean said.