By Jim Shrine

Avanir Pharmaceuticals Inc. officials, trying to get the FDA to change its decision on a recent new drug application (NDA) rejection on docosanol cream, said they came away encouraged after a meeting with the agency.

¿I view it as progress,¿ said Gerald Yakatan, president and CEO at Avanir. ¿We could have been turned down right off hand. They very fairly listened to what we had to say. We think there is a better understanding of our data.¿

The FDA deemed the oral herpes treatment not approvable in December, a decision that surprised Avanir officials, who believed pivotal studies had demonstrated efficacy. Yakatan said at the time that Avanir¿s first priority would be following up with the FDA and trying to get the decision reversed. (See BioWorld Today, Dec. 28, 1998, p. 1.)

¿We responded to their Dec. 22 [not-approvable] letter with a briefing document, which served as the basis of discussions we had this week,¿ Yakatan said. ¿Now, they¿re going to go back and take a closer look at that. I think our presentation helped them understand the briefing document even better. They will have at least one other meeting with us, and then we should get an idea where we are.

¿The main points we were trying to convey are that we actually had multiple studies that showed the same effectiveness,¿ he added. ¿We took a little different statistical view than we had before. There was something that was perhaps misunderstood, or we didn¿t put enough emphasis on it in the NDA.¿

But it was unclear whether the FDA will require a new pivotal trial, as it suggested in December, before approving the drug, Yakatan said.

¿A lot of companies get not-approvable letters,¿ Yakatan said. ¿A lot of them are because of things that can be corrected with additional data, or sometimes with another study. The question is, how much more do need to get that approval? We provided additional evidence of effectiveness. We tried to show them data [addressing] where it didn¿t look good from our side. But, if you look at the right patient population, it does look good.

¿I think in the end it will be a scientific decision,¿ he said. ¿We think we¿ve showed them the way and hopefully they will agree.¿

Yakatan previously said Avanir, of San Diego, would explore other options to generate revenues this year from docosanol or a docosanol-like product if follow-up discussions with the FDA were unsuccessful. Those included formulating a similar product for the over-the-counter market, and trying to get it on that market in countries outside the U.S.

Avanir ended 1998 with about $4.5 million in cash and equivalents, with a net loss of $2 million for the quarter. Since then, it has secured a $10 million equity line from a New York-based investment firm that can be drawn over two years if certain conditions are met.

One of those conditions is that Avanir¿s stock price be at least $1.064 a share. The price had fallen 65 percent ¿ from $2.09 to 71.8 cents ¿ when the negative news came out in December. The stock since has climbed back some, and closed Thursday at $1.015, down 7.8 cents on the day.

Last month, Avanir added to its pipeline by signing a letter of intent to license worldwide rights to a drug for treating a condition associated with amyotrophic lateral sclerosis (ALS). The deal, with a San Diego-based contract formulation development company called IriSys Research & Development LLC, is based on a patented combination of dextromethorphan and an enzyme inhibitor.

Avanir hopes to begin Phase II trials of the drug soon. The IriSys deal calls for milestone payments upon NDA filings and marketing approval, with no payments expected in the first two years.

The company said early studies suggest three potential applications: improving the quality of life in patients with ALS or other neurodegenerative diseases, relieving neuropathic pain and relieving intractable cough.

Avanir also has ¿a novel treatment for allergy that will get at the root cause of the disease,¿ Yakatan said. ¿We¿re trying to move that into an IND [investigational new drug] situation, maybe by the end of the year.¿