By Debbie Strickland

Texas Biotechnology Corp.'s lead drug candidate, the anticoagulant Novastan, has sailed through a Phase III clinical trial and appears headed for FDA approval.

"This is a very significant event," said David McWilliams, president and CEO of the Houston-based firm. "This is our first Phase III study and our first planned FDA filing, and I think the first one is always very significant for any biotechnology company."

News of the trial data pushed up the stock price (AMEX:TXB) to $5.625, a gain of $0.438.

"While not riskless, we believe these [trial] data are more than sufficient for [FDA] approval," states a report by analysts Tony Butler and Rob Rouse, of Lehman Brothers' New York office, who are also predicting "impressive upside momentum" in the company's share price.

The trial tested the drug as a treatment for serious allergic reactions to heparin, the most widely used injectable anticoagulant. There are approximately 200,000 cases a year in the U.S. alone, creating a market potential of at least $200 million and possibly as much as $500 million, according to McWilliams.

"There is no effective drug treatment right now," he said. "That's why we're hoping for an expedited review."

Lasting five to seven days, the Novastan intravenous treatment would be priced between $200 and $400 per day.

Novastan (argatroban) is a small-molecule inhibitor of thrombin, an enzyme involved in blood clotting. Texas Biotechnology licensed U.S. and Canadian rights to the drug, which is derived from an amino acid called L-arginine, from Genentech Inc., of South San Francisco. Texas Biotechnology's Novastan development partner, Synthelabo SA, of Montrouge, France, has European, African and Middle Eastern marketing rights. Mitsubishi Chemical Corp., of Tokyo, markets Novastan in Japan for chronic arterial occlusions.

McWilliams said his company is actively negotiating with potential North American marketing partners. The Lehman Brothers analysts said they expect an announcement this summer and an early third-quarter new drug application with the FDA.

"Our goal is to establish our own selling organization, but for our first product we're going to establish a partnership," McWilliams said.

The company has about $14 million in cash, enough to carry it through the end of the year, he said. In 1996, Texas Biotechnology reported a net loss of $20.4 million.

The Phase III trial in the U.S. tested Novastan for two indications: heparin-induced thrombocytopenia (HIT) and HIT with thrombosis syndrome (HITTS). The multicenter study compared 304 patients (160 with HIT and 144 with HITTS) treated with Novastan for up to 14 days with historical control patients (108 with HIT and 109 with HITTS).

The data demonstrated statistical significance in the primary efficacy endpoint, assessed by an overall composite index that included development of new thrombosis, all-cause amputation and all-cause death. The index was improved 19.2 percent in the HIT population and 20.3 percent in the HITTS group. The trial further showed that Novastan effectively treated thrombocytopenia by increasing platelet counts 129 percent in HIT patients and 198 percent in HITTS patients.

The company noted that the Novastan-treated patients tended to present with more pre-existing conditions than the control group. Otherwise, the measure might have shown results more in line with the results attained in a component of the index, the thrombotic composite outcome.

Novastan boosted this measure by 73.4 percent in HIT patients and 43.8 percent in HITTS patients. The composite looks at development of new thrombosis, amputation due to ischemic complications and death due to thrombosis.

The trial did not succeed in improving the Novastan patients' rate of ischemia-related amputation compared to the control group; the rates were about equal. However, "the majority of [Novastan patient] amputations were deemed necessary prior to a patient entering the trial," the company said.

Meanwhile, the company is continuing studies of combination therapies that would pair Novastan with tissue plasminogen activator (tPA) or with streptokinase, both clot-dissolving agents that are often combined with heparin to treat heart attacks.

A 120-patient Phase II trial with tPA and heparin showed a 29 percent improvement in artery-opening speed when patients were treated within six hours of symptom onset. The finding was statistically significant.

Though not actively involved in these trials, Genentech markets tPA as Activase, which holds upwards of 80 percent of the U.S. market for clot dissolvers, with approximately $300 million in annual sales.

Results from an additional, 1,200-patient Phase II trial of Novastan as an adjunct therapy should be available in late summer. Data analysis is underway at Synthelabo. *