By Lisa Seachrist

Washington Editor

BETHESDA, Md. — An FDA advisory panel voted 8-1 Friday to recommend Gliatech Inc.'s post-surgical, scar-preventing gel for marketing approval.

The Orthopeadics and Rehabilitation Devices Advisory Panel recommended that the FDA approve Gliatech's ADCON-L pending labeling changes that would detail the specific surgeries in which the gel is indicated and remove pain relief claims. The panel suggested the label clearly state the gel has demonstrated no long-term pain relief.

"I am extremely pleased," said Thomas Oesterling, president and CEO of Cleveland-based Gliatech. "We expected some conditions on the label based on our conversations with the FDA — these are ones that we can work with."

Over 400,000 lumbar disc surgeries are performed annually in the United States. Up to 40 percent of the patients undergoing surgery develop recurrent back pain and difficulty returning to their daily activities following surgery.

Scarring after back surgery, peridural fibrosis, is considered an important cause of this type of post-surgical back pain. In addition, scarring can obscure the nerve root, making subsequent surgery difficult for the surgeon and dangerous to the patient.

Trading in Gliatech's stock (NASDAQ:GLIA) was halted Friday afternoon during the panel's deliberations. Shares were down $2.875 to $7.625.

ADCON-L Anti-Adhesion Barrier Gel is a carbohydrate polymer gel that is designed to physically block formation of excess scar tissue. The gel is completely resorbed by the body in four weeks. The product currently is under expedited review at the FDA and would be Gliatech's first product should it win approval.

Gliatech presented data from a pivotal European trial and the interim analysis of a confirmatory U.S. trial. Both studies examined scarring as visualized by magnetic resonance imaging (MRI) following surgery on herniated discs at the lumbar 4 or lumbar 5 vertebrae. Neither the patient nor the radiologist reading the MRIs knew whether the patient had been treated with ADCON-L.

Studies Revealed Reduced Scarring, Pain

In the European study of 298 patients, at six months 38 percent of the ADCON-L treated group had extensive scarring compared with 50 percent of the control group. At 12 months, 28 percent of the ADCON group had extensive scarring compared with 41 percent of the control group. In addition, ADCON produced a 44 percent reduction in activity-related pain during the first six months. At 12 months, the difference was still noticeable, but not statistically significant.

The interim analysis of the U.S. clinical trial of 165 patients, 54 percent of the ADCON-L treated group had extensive scarring compared with 77 percent of the control group. The difference in activity-related pain was not statistically significant between the two groups, but there was a trend for less pain for ADCON-L treated patients.

ADCON-L wasn't associated with any adverse events, and both the ADCON-L treated patients and the control patients had similar rates of adverse events commonly associated with lumbar disc surgery.

"ADOCON-L has an excellent long term safety profile," said Derrick McKinley, Gliatech's medical director. "And continued patient improvement is predictive of longer term patient outcome."

Panel Member Questioned Effectiveness

Citing the relatively high rates of scarring and questioning the reliability of using MRI to assess scarring, Harold Wilkinson, a neurosurgeon at the University of Massachusetts, in Amherst, and consultant to the panel, didn't agree with the company's assessment.

"Ultimately, I think that ADCON-L is probably a safe product," Wilkinson said. "But, the company has not convincingly proven that the product is effective.

The panel, however, ultimately decided that ADCON-L was of sufficient benefit to patients to recommend the device for recommendation.

"It seemed clear to me that there was a reduction in pain," said Barbara Boyan, panel chair and professor of biology at the University of Texas Health Sciences Center, in San Antonio. "I do think the data convince me that there was a clinical benefit in pain and for second surgery."

ADCON-L is approved in 31 countries and has been used to treat over 10,000 patients. In addition to the product for use in back surgery, Gliatech is developing five other ADCON (adhesion control) products for use in tendon and peripheral nerve surgery, abdominal surgery, pelvic and gynecological surgery, cardiac surgery and implant surgery.

"This is a very big occasion for Gliatech," said Eric Schmidt, vice president of equity research at UBS Securities Inc., in New York. "I think we may see a pain claim creep onto the label. They presented two groundbreaking studies."

Schmidt estimates that the market could be as large as $100 million to $200 million a year.

The FDA is under no obligation to follow the advice of its advisory committees, but, in practice, usually does. *

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