By Randall Osborne

SAN FRANCISCO - Propelled by sales of Abelcet, its lipid formulation of amphotericin B for systemic fungal infections, The Liposome Company expects to enter an elite league in the industry, reporting profitability for the fourth quarter of 1998.

"I can't give you the exact amount yet, but we'll be releasing our financial results in about two weeks," said Charles Baker, chairman and CEO of Princeton, N.J.-based Liposome, during a presentation at the 17th annual Hambrecht & Quist (H&Q) Healthcare Conference here.

"We were cash-flow positive for the year, and this was done without increasing our level of borrowing or selling any new stock," Baker said.

Abelcet was approved in October 1996 as a treatment for a host of sometimes-fatal fungal infections in patients who fail to respond to standard amphotericin B or those who cannot tolerate the drug. The year before, Liposome had won FDA approval of Abelcet for treatment of aspergillosis. (See BioWorld Today, Oct. 22, 1996, p. 1.)

Baker said the company, which has been operating for 17 years, held its strong position despite two competing products, introduced in 1997: Menlo Park, Calif.-based Sequus Pharmaceuticals Inc.'s Amphotec, and Boulder, Colo.-based NeXstar Pharmaceuticals Inc.'s AmBisome.

The latter is marketed in the U.S. "with well over 100 sales representatives, so I think we're doing pretty well, considering we have only 40 salespeople in the field in the United States," Baker said.

More than 40,000 patients have been treated with Abelcet, and more than 3,200 hospitals and home care organizations make up the customer base.

Outside the U.S., the product is marketed in 21 countries through marketing partners, the latest of which to join the list is Amgen Inc., of Thousand Oaks, Calif., which will begin marketing Abelcet in Australia in about two weeks.

"Amgen does not have EPO [erythropoietin, which the company sells as Epogen] in Australia on their own, so this relationship makes a lot of sense for both companies," Baker said.

In December, Liposome filed a new drug application with the FDA for Evacet, its liposomal formulation of the chemotherapeutic agent doxorubicin. The company had disclosed a month earlier results from three Phase III trials, showing Evacet is comparable to two other first-line treatments of metastatic breast cancer but significantly less cardiotoxic than the non-liposomal form of doxorubicin.

Baker said research in the medical field found the two greatest concerns about existing doxorubicin treatments are efficacy and cardiotoxicity. In the Phase III trials, Liposome's formulation worked as well as conventional doxorubicin and "blew away" any worries about cardiotoxicity.

Last month, the company filed an investigational new drug application for TLC ELL-12, a liposomal ether lipid that can be used to treat a number of cancers, and expects to begin trials soon, Baker said.

"We're much smaller, in [terms of] the number of employees, than we were 18 months ago," he said, as a result of restructuring that will also be undertaken internationally.

The staff now numbers about 300, and most are "actively engaged in either making or selling Abelcet," Baker said. "We can handle more than one product and our financial goal is to get as many products into their hands as soon as possible. We expect the improving trend to continue into 1999."

The H&Q conference continues through today. Liposome's stock (NASDAQ:LIPO) closed Wednesday at $13.875, down $0.375. n