By Lisa Seachrist

Washington Editor

WASHINGTON — CollaGenex Pharmaceuticals Inc.'s periodontitis treatment appears to be back on track at the FDA after faltering over questions of statistical analysis.

After discussions with the agency over how to revitalize the stalled new drug application (NDA) for Periostat, the Newtown, Pa.-based company agreed to submit an amendment to its NDA, including a recently completed clinical trial that combines the drug with the standard of care for the disease.

"The agency itself suggested that we file the amendment and restart the clock on Periostat," said Brian Gallagher, president and CEO at CollaGenex. "We view that as a very positive sign. We believe our data are very good, and we remain pretty confident that we are on the right track with this product."

The company's stock (NASDAQ:CGPI) jumped 37 percent Tuesday, closing at $9.687, a $2.625 increase.

In periodontal disease, which affects up to 67 million Americans, bacteria around teeth cause inflammation, triggering the release of collagenase and separation of the gums from the teeth. Standard treatment involves the mechanical removal of bacterial deposits from below the gumline in a procedure called scaling and planing.

Periostat is a sub-antibiotic dose of the common antibiotic doxycycline. At Periostat's levels, the antibiotic inhibits the production of collagenase without generating bacterial resistance.

The company will provide the agency a full complement of the data from a study of 190 patients who received daily doses of either Periostat or placebo following scaling and planing. That study showed that Periostat as an adjunct to standard therapy stalled the progression of periodontal disease. The full results of the trial will be presented in June at the annual meeting of the International Association for Dental Research.

Submission of the amendment will reset the statutory clock, requiring the agency to complete review of the drug in six months. The company intends to submit the amendment in the next couple of weeks.

Kevin Tang, an analyst with BT Alex. Brown Inc., in New York, called the news "a major positive development," and raised his investment rating from a "buy" to a "strong buy."

"CollaGenex and the FDA appear to have agreed upon a pathway toward U.S. regulatory approval for Periostat that will not require an additional clinical trial," Tang said in a written statement. "As a result, we are now projecting FDA approval by late 1998 and product launch in early 1999." *