By Randall Osborne

Less than four months after Alliance Pharmaceuticals Corp. restarted Phase III trials for its drug for acute respiratory distress in pediatric patients, the company's partner, Hoechst Marion Roussel, has pulled out of a potential $100 million deal.

Alliance, however, has received $54 million in the pact.

Hoechst Marion Roussel, of Frankfurt, Germany, said it terminated the license agreement on LiquiVent (perflubron) because development of the drug proved too complicated. San Diego-based Alliance had targeted next year for approval of LiquiVent in pediatric patients, but the Phase III trial met stumbling blocks.

"We have the financial resources to develop the product on our own," said Gwen Rosenberg, spokeswoman for Alliance, adding that Hoechst's decision to pull out was amicable. "It was a business and priority decision, rather than a decision regarding the potential of the product."

Rosenberg said trials will resume in pediatric patients and neonates sometime next year, but "adults are a special focus, because they represent 80 to 90 percent of the population who may benefit."

Trials were begun in children because Alliance's first data seemed geared to that avenue of development. "All of our preclinical data was with small animals, so we moved with that into small patients," Rosenberg said.

LiquiVent is a biologically inert, oxygen-carrying liquid designed to improve breathing and reduce damage to patients with acute respiratory distress syndrome (ARDS) who are undergoing mechanical ventilation. The drug is administered directly into the lungs.

"It looks just like water, but carries about 20 times as much oxygen as water does," Rosenberg said.

Ventilators force oxygen into the lungs with the great pressure required to open tiny air sacs in the lung, but can in the process harm healthy air sacs. LiquiVent fills up the air sacs and holds them open so that oxygen can be given at lower pressure.

"The sooner you get the patient off the ventilator, the better," Rosenberg said. "The beauty of this is that we don't have to remove [LiquiVent]; we just allow it to evaporate."

Alliance made its deal with the pharmaceutical division of Hoechst AG, of Frankfurt, in early 1996. Hoechst bought $22 million in Alliance convertible stock, paid license fees and milestones totaling $7 million and contributed $25 million in research funding. Alliance was eligible for additional milestone payments, payback of reimbursement expenses and royalties. The deal was said to be potentially worth $100 million. (See BioWorld Today, March 1, 1996, p. 1.)

A year later, the Phase III trial faltered when Alliance observed the death rate was unusually low in the study's control group. Usually, mortality is greater than 30 percent with conventional assistance from mechanical ventilators. But the rate had dropped to single digits after 200 patients were enrolled, and Alliance stopped the trial to study the data. (See BioWorld Today, April 16, 1997, p. 1.)

Phase II In Adults To Start This Year

Solving the mystery took four months. Alliance discovered that, after it expanded the trial -- doubling enrollment on the basis of positive early results -- and then amended protocol in December 1996, the patients enrolled under the new design were younger and had differing risk factors for ARDS than the earlier controls. Also, the patients had received other therapies. Taken together, these factors thwarted efforts to compare responses to the drug. (See BioWorld Today, Aug. 29, 1997, p. 1.)

The delay of the pediatric trial pushed back a pivotal study in adult patients, which was expected to begin in the summer of 1997. Rosenberg said the company plans to start a Phase II trial in adults before the end of the year.

Alliance has two other products in clinical development. Oxygent (perflubron emulsion), an intravascular oxygen delivery system to supplement oxygen supply during surgery, is being developed with Johnson & Johnson, of New Brunswick, N.J. Two Phase II studies, evaluating the system in surgical patients and cardiopulmonary bypass patients, have been completed.

The other product, Imagent US, is an intravenous contrast agent that enhances cardiac ultrasound images and helps detect abnormal blood flow. It is being developed with Schering AG, of Berlin. Some Phase II studies have been completed and others are ongoing, Rosenberg said.

Phase III trials of Oxygent and Imagent US are expected to begin in the first quarter of next year, and development of all products will proceed as planned, Rosenberg said. "We have a good clinical development strategy in place, which we developed with the assistance of Hoechst," she said.

Alliance's stock (NASDAQ:ALLP) closed Monday at $8.0622, down $0.937. *