Negative reaction to Biogen Inc.'s failed Phase III trials of Hirulogsent its stock into a tailspin Tuesday, dropping $9 a share or 18percent the day after the Cambridge, Mass.-based companyannounced the disappointing results.Shares of Biogen (NASDAQ:BGEN) closed Tuesday at $40.However, some market analysts were not surprised by the poorperformance of Hirulog, an anti-coagulant that was being developedas a substitute for heparin."It's one of those issues where people believe something even whenthey don't have the answer," said David Crossen, an analyst withUBS Securities in New York. "The push got to be so great theythought they had a better version of heparin that could do thingseven heparin couldn't do."Biogen said Hirulog failed to show statistical significance comparedwith heparin in preventing complications associated withangioplasty. Based on those findings, the company also said it wasdiscontinuing its Hirulog program and concentrating its resources ongearing up to commercialize beta interferon for treatment of multiplesclerosis. The company anticipates filing for approval of betainterferon in the U.S. and Europe in the first half of next year. "Hirulog," Crossen said, "was not a significant product for Biogen.They were taking a drug in the same class of heparin and trying touse it to affect adverse events that are platelet driven. Hirulogdoesn't interact with platelets."The endpoints for the Phase III trials of Hirulog _ derived fromhirudin, a natural anti-coagulating enzyme secreted by leeches _were reduction in death, heart attacks, repeat angioplasty andemergency bypass surgery. Although Biogen is dropping theproduct, it said it will look for a marketing partner to continuedevelopment of the drug.Peter Drake, of Vector Securities International Inc., in Deerfield, Ill.,said Phase II findings published on Hirulog involved comparisons ofthe drug used at a high dose and a low dose and no control groupwas involved."The data was difficult to interpret," Drake said, "but there was a lotof data on [Switzerland-based] Ciba-Geigy's Hirudin that alluded toit working."Drake added, "The loss of Hirulog definitely increases the stakes onbeta interferon and leaves Biogen a one-product company with arich, but preclinical portfolio of products."Edmund Debler, of Mehta and Isaly in New York, said, "Clearly theHirulog trials are a setback for Biogen. But if the stock drops acouple of dollars below $38, it's a good buy."Crossen wouldn't speculate about when Biogen would recoup theground its stock lost to the Hirulog trial results."There have been a lot of failures and people are more cautious," hesaid. "Biogen has an enormous opportunity with beta interferon. Butit's still at least a year and a half away.""It's a difficult field," Debler said. "One out of 10 products that enterPhase I fail and biotechnology hasn't changed that equation. Buteverything occurs in a fish bowl and biotech companies tend to moveproducts along more aggressively than traditional drug companies."n

-- Charles Craig

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