By Debbie Strickland

Centocor Inc. met a key end-of-the-year milestone by filing a biologics license application (BLA) with the FDA for Avakine (infliximab), a monoclonal antibody treatment for moderate to severe Crohn's disease, including fistulizing Crohn's disease.

Since the only approved therapy for the disease is the side-effect-riddled steroid prednisone, the company has requested fast-track action on its BLA.

"There is a significant unmet clinical need," said Julie McHugh, Centocor's director of worldwide marketing. "The [Crohn's disease] community is anxious to receive a new alternative and we think the FDA will concur."

Centocor plans to market Avakine itself in the U.S., a departure for the firm, whose first blockbuster drug, ReoPro, is marketed worldwide (except Japan) by Eli Lilly and Co., of Indianapolis.

Centocor, however, is looking for an international partner for markets outside the U.S. Earlier this month, the company said it would not meet its goal of signing up a partner by year end, disappointing investors, who sent Centocor shares (NASDAQ:CNTO) tumbling 17 percent.

"We're not getting into the particulars of why we were not able to . . . conclude such an agreement by the end of the year," said Paul Wulfing, Centocor's treasurer and senior director of communications.

"It's not a question of interest," added McHugh. "It's a question of signing an agreement that maximizes Centocor shareholder value."

Not all observers reacted skittishly to the partnering delay.

The "recent . . . volatility has created an attractive valuation," wrote analyst Anthony Butler, of Lehman Bros., in New York, in a year-end report. Butler's price target is $65 — nearly double Tuesday's close of $33 (down $0.50) — and his firm calls Centocor "our top biotechnology pick for 1998."

As for Avakine, Butler projected a mid-1998 launch and pegged year 2000 sales at more than $350 million.

In two Phase III studies, the drug maintained remission in Crohn's disease patients and helped heal painful fistulae in two-thirds of those patients.

In one of the studies, a single infusion produced clinical improvement in two-thirds of patients as measured by a scale called the Crohn's Disease Activity Index. By comparison, only 17 percent of the placebo patients improved.

A second study focused on Avakine's effect on one of the major complications of Crohn's disease, fistulae. Ninety-four patients with fistulae who had failed treatments with steroids were given three infusions of either Avakine or placebo. Two-thirds of the patients receiving Avakine had 50 percent of their fistulae close.

Avakine works by blocking the action of tumor necrosis factor alpha, a cytokine implicated as an overstimulator of the immune system in several inflammatory diseases, including Crohn's disease and rheumatoid arthritis.

The drug currently is undergoing an international pivotal Phase III study in rheumatoid arthritis, with completion of the first endpoint expected in mid-1998. *