NeXstar Pharmaceuticals Inc. won FDA approval of its first product,DaunoXome, making it the second company in the U.S. to receiveclearance of a liposomal drug delivery system to reduce toxic sideeffects of approved chemotherapeutic agents for cancer.

NeXstar's stock (NASDAQ:NXTR) jumped $2.75 to close at $25.50Tuesday, a 12 percent increase.

DaunoXome is the Boulder, Colo., company's liposomal form of thechemotherapeutic agent, daunorubicin, and was approved as a first-line treatment for AIDS-related Kaposi's sarcoma.

In November 1995, Sequus Pharmaceuticals Inc., of Menlo Park,Calif., received FDA clearance of Doxil for AIDS-related Kaposi'ssarcoma as a second-line treatment after the standard therapy failed.Doxil is a liposomal form of doxorubicin, another chemotherapeuticagent.

Both companies also have received European approvals of theirproducts for Kaposi's sarcoma, which affects about 12,000 to 15,000patients in the U.S. each year.

Liposomes are designed to deliver drugs directly to the disease site,decreasing adverse reactions associated with systemic use of thechemotherapy. The standard anthracycline-based three-drug regimenfor Kaposi's sarcoma is adriamycin, bleomycin and vincristine(ABV).

Patrick Mahaffy, NeXstar's president and CEO, told BioWorldToday DaunoXome dramatically reduces the side effects associatedwith ABV treatments. "The incidence of hair loss is reduced to zero,"he said, "and fatigue and nausea are reduced."

Mahaffy said DaunoXome, which will be available in two weeks,also decreases the cardiotoxicity associated with anthracycline-baseddrugs.

Clinical trials of DaunoXome, which were evaluated against ABV,showed it was as effective as the standard therapy in treatingKaposi's sarcoma.

"We're very enthusiastic to have joined an elite group ofbiotechnology companies with an approved drug in the U.S.,"Mahaffy said. Boosting the company's excitement, he added, wasclearance of DaunoXome as a primary therapy. "It's rare to get a firstapproval for a first-line therapy for an oncology product," heobserved.

DaunoXome, administered by injection, will cost patients about $430per treatment cycle, which is every two weeks. Mahaffy described theprice as a "modest increase over ABV" and "half that of a competingliposomal product."

Sequus' Doxil is taken intravenously once every three weeks at aprice of about $1,200 per patient. The company reported first quarter1996 sales of $4.3 million, which were higher than many Wall Streetanalysts expected for the second-line therapy.

Both NeXstar and Sequus are conducting clinical trials of their drugsfor other solid tumor cancers and competition for sales is expected tobe heated.

The Liposome Co., of Princeton, N.J., is developing a liposomalform of doxorubicin, called TLC D-99, in a collaboration with NewYork-based Pfizer Inc. The drug is in Phase III trials for metastaticbreast cancer and is not expected to reach the market for severalyears.

NeXstar, Sequus and The Liposome Co. also are competing indevelopment of delivery systems for the anti-fungal drug,amphotericin B. However, the methods used are different.

The Liposome Co., in November 1995, received FDA approval of itsamphotericin B lipid complex, Abelcet, as a second-line treatment foraspergillosis. The drug also is approved in Europe.

NeXstar's AmBisome is a liposomal form of amphotericin B and issold in 22 countries outside the U.S. NeXstar is expected to file forFDA approval of AmBisome this year.

Sequus' Amphocil, a lipid-based form of amphotericin B, is approvedin several countries in Europe and the company's new drugapplication in the U.S. is under review.

Sequus's stock (NASDAQ:SEQU) was up $1.37 to $15.87 Tuesday.The Liposome Co. (NASDAQ:LIPO) closed at $21.87, up 50 cents. n

-- Charles Craig

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