Celtrix Pharmaceuticals Inc. said preliminary findings in its Phase IIItrial of recombinant BetaKine for treatment of macular holes in theretina, a potentially blinding eye disorder, are inconclusive and thecompany will delay filing for market approval with the FDA.The findings, based on three-month follow-up data of 120 patientswho received either the drug or a placebo during surgery to repairthe holes, sent the stock of Santa Clara, Calif.-based Celtrix down 63percent Monday. Celtrix (NASDAQ:CTRX) closed at $2.44, down$4.20.Dale Stringfellow, Celtrix's president and CEO, said investigatorswill continue to evaluate patients and make a decision in nine monthson whether to file a product license application (PLA). The studieswere conducted to test BetaKine's effect on improving tissue repairand vision in connection with vitrectomy for patients with macularholes."The early three-month data was not significant [compared with theplacebo]," Stringfellow told BioWorld, "but we hope to seeimprovement in the BetaKine patients over the next nine months andwe hope to file the PLA then. We didn't over-promise anything onthis. We had good Phase II results."Matthew Geller, of Oppenheimer & Co., called the preliminary dataa setback, but not a fatal one. He said the company originallyintended to base its PLA for macular holes on 12-month follow-updata and the drug still may work."Three months may not have been enough time to show efficacy," hesaid.However, Geller added, it may take time and some positive trialresults for the stock to recover. "In biotechnology, you're guilty untilproven innocent," he said.He described BetaKine, a recombinant transforming growth factorbeta-2, as "a powerful molecule" with numerous indications. Thepreliminary findings in the macular hole studies, he said, are notindicative of the drug's overall potential."You can't say anything about BetaKine, in general, from this,"Geller said, including the drug's potential performance for maculardegeneration, which Celtrix is studying in Phase II trials.In June, Celtrix licensed BetaKine to Cambridge, Mass.-basedGenzyme Corp. for development of the drug for diseases other thanophthalmic disorders. Genzyme has clinical trials of BetaKine underway for wound healing and multiple sclerosis.A Genzyme spokesman said Celtrix's BetaKine findings will notchange the course of that company's studies.Stringfellow also said the "disappointing" preliminary data will notaffect Celtrix's studies for macular degeneration, a disorder thataffects more people than macular holes."We pursued our first product opportunity in a small market to buildup our capability and credibility," Stringfellow said. While hedoesn't think the findings will hurt the company financially, hesuggested it may take time to re-establish investors' confidence."Reputations are built slowly," he observed, "and downgradedrapidly." At the end of the third quarter, ending Sept. 30, Celtrix had about$30 million in cash and a projected burn rate of $20 million a year.Stringfellow said the company's burn rate will be cut "significantly"by the delay in the PLA filing, however, the reduction was notcalculated Monday. He said no other changes are planned for thecompany.The Phase III trials were conducted with recombinant BetaKine andwere designed, in part, to confirm findings of the successful Phase IItrials using native drug material. The Phase II studies involved 93patients.In both studies, BetaKine was applied around the edges of a macularhole in the retina during vitrectomy. The placebo-controlledtreatment protocol and dose level also were the same.In November 1993, a one-year follow up of patients involved in thePhase II studies showed that 97 percent of the participants receivinghigh-dose BetaKine (1,300 nanograms) had a flattening of themacular hole compared with 47 percent in the placebo group. Inaddition, 79 percent showed two-line improvement in vision asmeasured on a standard eye chart and 72 percent showed three-lineimprovement.Stringfellow said there is no indication that the Phase III preliminaryfindings are connected to replication of the native drug material."We need to go back and work with the clinical investigators tounderstand what happened," he said. n

-- Charles Craig

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