By Frances Bishopp

After suffering what some analysts would describe as a stumble in the march for FDA approval, Cephalon Inc. and its partner Chiron Corp. have filed a much-anticipated new drug application (NDA) with the FDA seeking clearance to market Myotrophin in the U.S. for the treatment of amyotrophic lateral sclerosis (ALS).

Cephalon's stock (NASDAQ:CEPH) closed Tuesday at $26, down $1.375. Chiron's stock (NASDAQ:CHIR) gained $0.250 to end the day at $18.125.

Several analysts who have followed progression of the drug said there is a good chance that it will achieve FDA approval.

Meg Malloy, an analyst with Hambrecht & Quist Inc., of New York, said the odds favor potential approval for Myotrophin, which, she said, as a major proprietary drug for Cephalon is important event for the company.

"The bottom line is the pivotal data was supportive as far as the therapeutic potential of the drug," Malloy told BioWorld Today. "It's not a cure for ALS, but I do think it has demonstrated an ability to retard the rate of deterioration in patients, which is critical. I don't think there are any safety issues and there are not that many options for ALS patients."

Tim Wilson, with UBS Securities Equity Research, of New York, said Myotrophin would gain approval in the third quarter of 1997, and Cephalon and Chiron would be asked to conduct a Phase IV post-marketing study.

"Up until now, the agency's sole reservation concerning the drug has been that efficacy data from the European pivotal trial did not support results from the North American study and that two independent confirmations of efficacy are required under FDA guidelines for approval," Wilson said. "We are aware that exceptions to the two-study rule have been made in the past and in a disease as severe and untreatable at ALS, we think such exceptions can be made again."

Peter Ginsberg, of Vector Securities International, of Deerfield, Ill., gives it a 70 percent probability for approval based on the two completed pivotal trials and the fact that there is only one approved treatment on the market at this time for ALS.

In January 1996, a delay in getting FDA approval to make Myotrophin available to ALS patients outside clinical trials generated concern among investors and drove down Cephalon's stock price 35 percent.

"We're great believers in the drug and believe we have enough information to support the application for marketing," Jason Rubin, vice president of corporate communications at Cephalon, told BioWorld Today.

"We believe that the drug will receive an expedited review from the FDA, which means they could reach a decision within six months," Rubin said. Chiron will manufacture the drug, and Cephalon will market it to neurologists in the U.S. The companies will most likely collaborate on the marketing in Europe with each company having specific roles in the marketing and distribution of the product.

In January 1994, Chiron, of Emeryville, Calif., agreed to purchase 750,000 shares of common stock and warrants to purchase an equal number of shares from Cephalon for $15 million to develop Myotrophin, a recombinant human insulin-like growth factor (IGF-1), for the treatment of ALS and a variety of peripheral neuropathies.

IGF-1 is a naturally occurring protein which, among other potential activities, mediates the recovery of peripheral nerves from injury. ALS is a fatal neuromuscular disease characterized by the chronic, progressive deterioration of motor neurons. It is the loss of these motor neurons that leads to muscle weakness, muscle atrophy and eventually death from respiratory failure. ALS affects approximately 70,000 people worldwide.

In June 1995, positive late-stage Myotrophin trials sent Cephalon's stock soaring 400 percent, only to plummet dramatically in January 1996 when the FDA expressed concerns about data from the second Phase III study conducted in Europe. The FDA was reviewing Myotrophin in response to a treatment investigational NDA filed by Cephalon.

The October 1995 results of the European trial were not as strong as those from the 266-patient North American study, but Cephalon, of West Chester, Pa., said findings supported the positive conclusions from the first trial.

In both studies, Myotrophin achieved statistical significance in slowing progression and lessening severity of ALS, also called Lou Gehrig's disease.

When the European trial results were reported, however, some analysts expressed concern that twice as many patients died in the drug group as in the placebo group. Cephalon officials said the data showed Myotrophin did not cause the deaths.

In the nine-month European trial, 124 patients received Myotrophin and 59 were given placebo. Of the 23 patients who died, 18 were in the drug group and five were in the placebo group. Because there were twice as many patients taking the drug, the mortality rate was about two to one.

In May 1996, the FDA took the unusual step of scheduling an advisory committee review of the drug. The panel, subsequently, unanimously recommended clearance and in June 1996, the FDA cleared a treatment investigational new drug early access program for the use of Myotrophin. The drug was offered free of charge under the program with the plan that patients would be switched to payment system once the NDA is approved.

Currently, only one drug, Riluzole, a small molecule compound, marketed under the name Rilutek by Rhone-Poulenc Rorer Inc., of Collegeville, Pa., has been approved for treatment of ALS.

At the end of 1996, Cephalon filed its first NDA with the FDA for Provigil, or modafinil, to treat narcolepsy. In January, Cephalon's partner, Schering-Plough Corp., of Madison, N.J., terminated a six-year Alzheimer's disease drug collaboration, which represented a loss in research funding to Cephalon of approximately $3 million a year.

Cephalon, founded 10 years ago, has approximately $189 million in cash. *

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