The failure of Matrix Pharmaceuticals Inc.'s AccuSite Injectable Gelto achieve statistical significance against components of the drug isexpected to delay filing for an undetermined period in the basal cellcancer indication.

A new drug application seeking approval to market AccuSite forgenital warts already is on file in the U.S., and the product wasdeemed approvable in Europe for that indication. The company hadsaid filing of a supplemental application for basal cell cancer wasexpected in mid-1997.

But the results released Tuesday are expected to set back thattimeline. AccuSite is a sustained-release package consisting of abiodegradable protein matrix, 5-fluorouracil (5-FU) and thevasoconstrictor epinephrine. A Phase II study required by the FDAwas comparing AccuSite against 5-FU and collagen; 5-FU andepinephrine; and against free drug.

"We need to show each ingredient in the formulation makes astatistically significant contribution to the performance of theproduct," said Beverly Holley, Matrix's director of investor relationsand corporate communications. "We have not demonstrated thenecessary separation between these arms."

Holley said Matrix, of Fremont, Calif., said it was not the free 5-FUarm that AccuSite failed to beat in the trial. But she would notdisclose which of the other two arms compared favorably toAccuSite.

The company's stock (NASDAQ:MATX) fell $7.63, or 28 percent,Tuesday to close at $19.38 in trading of 3.1 million shares.

Holley said results of the contribution of components trial shouldhave no effect on the genital warts filing or development ofIntraDose, a similar product (using cisplatin instead of 5-FU) that's inPhase III trials for head and neck cancers and late-stage studies inother cancer indications.

Alex Zisson, an analyst at New York-based Hambrecht & Quist, saidresults of the AccuSite basal cell cancer trial won't affect IntraDosedevelopment or the genital warts filing. He said investors' concernsabout either of those scenarios probably led to the stock drop.

AccuSite was shown in Phase II trials to have benefit for squamouscell carcinoma skin cancer. Final data from that trial, releasedTuesday, showed complete responses in 22 of 23 treated lesions.Company officials, however, have no plans at this time to continuedevelopment of AccuSite in that indication.

Zisson, noting that a number of analysts projected significant salesand earnings for Matrix in 1998, said it will be more difficult to getoff-label AccuSite use in squamous cell carcinoma from a genitalwarts approval than it would be if the product was approved for basalcell cancer.

AccuSite already is being tested in one Phase III trial to assess five-year recurrence data in basal cell cancer patients. Holley said thatstudy is in its follow-up period, but results won't be needed for a newdrug application. She said another Phase III trial involving 225 basalcell cancer patients is about to begin.

The company has not decided whether it would be advantageous tomodify that study in light of the new data, Holley said. She saidMatrix still will have to demonstrate all the AccuSite components arebeneficial, but said officials there will need time before deciding onthe best course of action.

Holley said the FDA's topical drugs division requires contribution ofcomponent trials while the agency's oncology division does not.

Matrix, which reported $66 million in cash and equivalents on March31, 1996, raised more than $62 million in an April 2, 1996, offeringof 2.75 million shares priced at $22.63 each. In October 1995 Matrixraised nearly $48 million from the sale of 3.6 million shares at$13.25. In both offerings demand led to increases in the stock priceand shares offered. n

-- Jim Shrine

(c) 1997 American Health Consultants. All rights reserved.