ImmuLogic Pharmaceuticals Inc. plummeted 17 percent after thecompany revealed last week the resignation of president and CEORichard Gerety and the planned departure of its chief financialofficer, Richard Small.
Officials of the Waltham, Mass., company did not state a reason forGerety's exit. But Susan Primrose, ImmuLogic's director of investorrelations, said Gerety's resignation was unrelated to Small'sdeparture.
Small is leaving to help found a start-up company, called ImmuneTherapeutics Inc., which also will be headquartered in Massachusetts.He will be senior vice president and chief financial officer of the newfirm.
Following Gerety's resignation Wednesday, Small agreed to remainat ImmuLogic temporarily to assist in transition of the company'sleadership.
Joseph Marr, ImmuLogic's chief scientific officer and executive vicepresident of research and development, will assume additional dutiesas acting president and CEO. Marr also is a candidate for thepermanent positions of CEO and president. Primrose said the boardof directors is expected to appoint a new leader by the first quarter of1997.
Gerety's departure, revealed after the market closed Wednesday,pushed the company's stock (NASDAQ:IMUL) down $1.625 thenext day to $7.875, a 17 percent drop. The decline continued Friday,with the stock down another 25 cents by midday.
ImmuLogic's most advanced programs are its Allervax allergy drugs,which are in late-stage clinical development. The company suffered asetback in March when Hoechst Marion Roussel, of Frankfurt,Germany, ended its collaboration on those products. ImmuLogicregained on all rights to the Allervax products, but its stock fell 22percent to $13.25 when Hoechst's partnership termination wasrevealed.
The Allervax products use allergy-causing proteins to re-educate theimmune system not to trigger a response to the specific invadingallergen, such as pollen from ragweed or dander from cats.
ImmuLogic had been collaborating since 1992 on the Allervaxprogram with Marion Merrell Dow Inc., of Kansas City, Mo., whichwas acquired in 1995 by Hoechst AG, of Frankfurt, Germany, theparent company of Hoechst Marion Roussel.
In reorganizing its drug-making efforts, Hoechst has discontinuedvarious other biotechnology collaborations of Marion Merrell,including those with Scios Inc., of Mountain View, Calif., and AlteonInc., of Ramsey, N.J.
In February, a month before Hoechst pulled out of the Allervaxprogram, ImmuLogic's stock jumped to $19.75, after data fromPhase II/III trial of Allervax Ragweed showed the drug achievedstatistical significance in improving allergy symptoms.
Results of a second Phase II/III trial of Allervax Ragweed areexpected in the first quarter of 1997. The data have not yet been seenby officials of the company. If the study is successful, an applicationfor U.S. market approval will follow discussions with the FDA.
The other most advanced Allervax product, targeted for treatment ofallergies to cats, has completed Phase III trials. Release of the data inlate April showed the drug achieved statistical significance vs.placebo at a single dose level _ the same that proved effective in theAllervax Ragweed study.
However, the Allervax cat trial evaluated four dosing regimens andImmuLogic was expected to meet with the FDA to determine ifanother trial is necessary to evaluate the successful regimen, alone, ina placebo-controlled trial. Company officials said they likely willconduct an additional study, which will begin following completionof the FDA talks.
ImmuLogic is negotiating with potential new partners for theAllervax products. Gerety's departure is not expected to slow thosediscussions or the advancement of the company's other programs.
In addition to targeting allergies, ImmuLogic is focusing onautoimmune diseases. Both allergies and autoimmune disorders, suchas multiple sclerosis, are linked to inappropriate immune systemresponses.
In its autoimmune disease drug development, ImmuLogic said it is onschedule to file an investigational new drug application with the FDAby the end of this year to begin clinical trials of a peptide-based drugfor multiple sclerosis. The drug is under development with ScheringAG, of Berlin, Germany.
As for ImmuLogic's financial health, Primrose noted the company,which has an annual burn rate of about $20 million, expects to end1996 with $65 million to $70 million in cash. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.