By Charles Craig

Alliance Pharmaceutical Corp. shares plummeted 39 percent Tuesday after the company said it was suspending a Phase III trial of its oxygen carrier, LiquiVent, for acute respiratory distress syndrome (ARDS) in infants.

Gwen Rosenberg, spokesman for San Diego-based Alliance, said the study was stopped to determine why the death rate, typically greater than 30 percent with conventional assistance from mechanical ventilators, was so low among infants in the trial's control group.

The patients, all on ventilators, were randomized to receive either LiquiVent in the treatment group or no drug in the control group.

After nearly 200 patients were enrolled, Rosenberg said the death rate among infants in the control group dropped to single digits. That indicated, to Alliance, a possible flaw in the study's design or randomization scheme. There also could be a problem with identification of disease criteria, she said, such as infants enrolled in the control group who are significantly more healthy than those in the treatment group.

Suspending the trial, whose primary endpoint is reduction in mortality, did not involve any LiquiVent-related adverse events, Rosenberg said.

"LiquiVent was still doing what we expected," she added.

Investors, however, sent Alliance's stock (NASDAQ: ALLP) tumbling $4.188 to $6.435 at the close of trading Tuesday.

The Phase III study was started in January 1996 and a review was conducted in August of that year, after 50 patients were enrolled. Data revealed mortality in the control group was greater than 30 percent while in the treatment group the death rate was substantially less.

Rosenberg said, after reviewing the August 1996 findings, Alliance changed the primary endpoint to reduction in mortality.

Analysis of the Phase III trial will take three to six months, she said, and it will delay the start this summer of a Phase II/III study of LiquiVent in adults with ARDS.

LiquiVent is an oxygen-carrying liquid designed to improve patients' breathing and reduce damaging exposure to ventilators. *