In news bringing back memories of ill-fated 1994 clinical studies,Lidak Pharmaceuticals Inc. reported its oral herpes drug failed toachieve statistical significance because the placebo performed betterthan expected.

Results from two double-blind Phase III studies of Lidakol (n-docosanol 10 percent cream), with a total of 648 patients, weredesigned to determine if the drug speeded the healing time of oralherpes, or herpes simplex virus 1.

While the average duration of five days was 35 percent better thanprevious episodes in the patient group and historical controls, it wasno better than placebo. That result likely will mean another study willbe needed before Lidak can file for marketing approval.

Lidak's stock (NASDAQ:LDAKA) dropped 47 percent, or $2.19,Friday to close at $2.50.

"Clearly the investment community reacted to the setback in the timeschedule and the fact we would have to perform another study,"Michael Lorber, Lidak's vice president and chief financial officer,told BioWorld Today. "While we agree our timeline is pushed backwe remain confident of the activity of the drug and plan toaggressively move forward in conducting additional studies."

Lorber said Lidak should be able to conduct any additional studiesfaster than the one-year studies just reported.

Statistically significant benefit was seen in one of the studies as itrelates to a secondary endpoint _ aborting progression of herpes tothe blister stage _ in the 40 patients who initiated treatment whenthey experienced redness as the early sign of an outbreak. Lesionswere aborted in 76 percent of Lidakol-treated patients vs. 37 percentof those in the control group (p=0.036).

The control contained all the substances of Lidakol except n-docosanol, which was replaced by another chemical compound.Lorber wouldn't reveal that compound, and said while the companydoesn't plan to evaluate it in terms of a potential drug, it may seekpatent protection and study it further. He said the placebo compounddid not show that activity in animals.

Yamanouchi Europe B.V., of the Netherlands, split the costs of thePhase III studies with Lidak. Yamanouchi has rights to the product inEurope. Last month Lidak licensed rights in the U.S. and some otherparts of the world to Bristol-Myers Squibb Co., of New York.Specific terms weren't revealed, but the deal included an up-frontpayment to Lidak, potential milestones and a royalty on sales.Bristol-Myers also was to fund development costs going forward.

Lorber said discussions between the two companies would be neededto determine funding obligations in light of these trial results. He saidthe companies will work together on designing a new study.

In a Phase III study of Lidakol released in September 1995, the agentwas shown to have comparable activity to acyclovir, which London-based Glaxo Wellcome plc sells in Europe as Zovirax 5 percentcream. Another Phase III study _ testing Lidakol in late-stage oralherpes episodes _ is being analyzed, Lorber said, and results fromthe 544-patient study should be available in April.

Lidak currently has more than $20 million and is spending about$700,000 per month, Lorber said. n

-- Jim Shrine

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