The second liposomal product was approved in the as many days by the FDA as The Liposome Co. Inc.received notification that its amphotericin B lipidcomplex was cleared for marketing.

The drug, formerly called ABLC, will be sold as Abelcet,the same name it has outside the U.S. It is indicated forthe treatment of aspergillosis in patients refractory to orintolerant of conventional amphotericin B.

The Liposome Co., of Princeton, N.J., said it has a 20-person sales force in place and expects to have theproduct available for physicians in early January. Theliposomal form of the drug allows for larger doses andcauses less damage to the kidneys, a major drawback tothe free form of the drug.

The FDA approval letter, received at The Liposome Co.late Monday, came as a surprise to some because of theFDA's speed and because it went through without anadvisory panel recommendation. (The agency's AntiviralDrugs Advisory Committee last April extensivelydiscussed issues pertaining to liposomal antifungals,however.)

"It's a testimony to the data package they put together,"said David Crossen, an analyst with San Francisco-basedMontgomery Securities. "It was a flawless, clean andeasy-to-understand package of data that precisely metFDA requirements."

Abelcet will be priced about 10 times more thanconventional amphotericin B, but Crossen said theliposomal form will be widely used despite the pricebecause of the life-or-death nature of the infection. Heestimated 1996 U.S. sales at $52 million ($69 millionworldwide) and international sales up to $365 million in2000.

A more conservative estimation was offered by AlexZisson, an analyst with New York-based Hambrecht &Quist Inc. He said all patients who don't already havekidney toxicity will be started out with conventional drugbecause of the price differences.

Zisson estimated 1996 U.S. sales of Abelcet at $20million ($30 million worldwide) and international salesof $157 million in 2000.

Aspergillosis is a fungal infection that generally affectspatients with compromised immune systems, such asthose with AIDS or undergoing chemotherapy. TheLiposome Co.'s product adds two phospholipids toamphotericin B, a generic drug that's been sold for manyyears.

Zisson said there will be some "sticker shock" whendoctors first see the price of Abelcet. But experimentationby doctors and closer looks at the label will allow formore aggressive treatments, he said.

Crossen said the label is "extremely powerful" because itsets up a direct comparison to first-line amphotericin Btreatment and a connection with candida infections. Italso clearly details safety issues, he said. (Trials haveshown Abelcet offers similar response rates and toxicityadvantages to conventional amphotericin B againstcandidiasis, a larger market than aspergillosis. Companyofficials won't discuss future regulatory strategies in thator other indications).

Brooks Boveroux, The Liposome Co.'s vice president,finance and chief financial officer, said the drug will bepriced at $130 per vial, with most patients requiring threeor four vials per day. About 1 million vials ofconventional amphotericin B (one vial equals one day oftherapy) are used each year in the U.S., he said, addingthat historical response rates are estimated at about 23percent.

"Hopefully," Boveroux said, "pricing will be a lot lessimportant than what the drug does for patients. The keything is that Abelcet is a drug at least equally efficaciousand significantly less nephrotoxic than conventionaldrug."

Crossen agreed: "It's not just a somewhat better drugwith a higher price. It's a case where you can use muchhigher doses for much longer periods of time of the onlyantifungal effective in this life-or-death setting."

Zisson, Crossen and Mike King, a vice president at NewYork-based UBS Securities, agreed that The LiposomeCo. has a leg up on its competitors in the U.S. market forliposomal amphotericin B.

King suggested that free amphotericin B use may becomerestricted to extremely severe cases. "The whole marketwill shift to liposomal products," he said. "LIPO will bein a good position to capture good market share in theU.S."

Sequus Pharmaceuticals Inc., of Menlo Park, Calif., isexpected to shortly file for approval of its amphotericin Bproduct. Further behind is NeXstar Pharmaceuticals Inc.,of Boulder, Colo., even though it is clearly the marketleader in Europe, where amphotericin B products fromSequus and The Liposome Co. also are being marketed.

Sequus announced earlier Monday that it receivedmarketing approval for Doxil, its liposomal formulationof doxorubicin, for the treatment of refractory Kaposi'ssarcoma. NeXstar's liposomal Kaposi's sarcoma product,DaunoXome, is awaiting market clearance as a first-linetreatment.

Crossen, who initiated coverage of The Liposome Co.Tuesday with a buy and target price of $25 in one year,said, "The Liposome Co. now enters that limited andprivileged group of companies that will be driven byearnings expectations over the near term. The earningspotential is quite enormous." He estimated the companybecoming profitable in 1997, with per-share earnings of84 cents.

The Liposome Co.'s stock (NASDAQ:LIPO) gained 75cents Tuesday to close at $16. NeXstar(NASDAQ:NXTR) and Sequus (NASDAQ:SEQU) eachlost 38 cents Tuesday to close at $12.75 and $12.63,respectively. n

-- Jim Shrine

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