Gensia Inc.'s much-anticipated results from Phase III trials of itslead product, Protara, for myocardial infarction during heartsurgery, did not show statistical significance and as a result the SanDiego-based company stopped work on the compound.Release of the data's preliminary analysis by the company'sinvestigators sent Gensia's stock tumbling 51 percent, from $10.37to $5.06 at the close of trading Monday. The company's spin-offresearch and development firm, Aramed Inc., also of San Diego,lost 33 percent, closing at $11, down $5.50.Gensia spokeswoman, Elizabeth Foster, said no decision will bemade on the Protara clinical program until a final analysis of thedata is complete and until Gensia officials meet with the FDA toreview the trials' findings and those of previous studies.The study for prevention of heart attacks during heart bypasssurgery was the third Phase III trial in that indication. AnotherPhase III trial of Protara for patients at risk of cardiovascularcomplications during non-cardiac surgery also was discontinued.Gensia's president and CEO, David Hale, said in a preparedstatement that despite the "disappointing" results, the companybelieves the adenosine regulating agent (ARA) technology, onwhich Protara is based, has potential in other therapeuticapplications.Matthew Geller, of Oppenheimer & Co. in New York, expressed adifferent perspective. "The problems with Protara," he said, "areindicative of the whole technology platform. They indicate theARA technology is not meaningful."However, Richard Stover, of Stover, Haley, Burns Inc. in Stamford,Conn., said he isn't ready to abandon the technology. "My instinctstell me the results [of the trial] are not likely to lead to theconclusion that there's no value to ARA technology," he said.Gensia stopped the trial for myocardial infarction during heartsurgery Aug. 12 on recommendation of an independent safety andmonitoring committee. The panel said safety was not a factor, butno other information about the blinded trial was released.Protara is designed to promote delivery of oxygen to heart muscletissue through regulation of the release of adenosine, which dilatesblood vessels.When the trial was halted, 2,700 patients of a possible 4,500patients were enrolled. The company said that until it analyzed thedata it would not know if the panel based its recommendation onfavorable or unfavorable findings in the drug's performance.Speculation Has VariedDuring the past three months, speculation among analysts about thefindings varied with some taking a wait-and-see attitude and otherspredicting positive or negative results. The trial was the third PhaseIII study for preventing heart attacks in patients undergoing bypasssurgery.Geller had forecast an unfavorable outcome based on performanceof the drug in the first two Phase III trials and on indications inpreclinical studies that Protara "didn't do what it was intended todo, and that is, regulate adenosine."The Protara findings, Geller said, are "positive for thebiotechnology industry. The moral to this story is, if a companydoes a Phase III study that shows no statistical significance in theprimary endpoint, you don't put value in the stock."Geller was referring to the first Phase III trial in the U.S. of Protara.The 1992 study initially was designed to test the drug's effect on aloose definition of what constituted a heart attack. After the trialbegan, the company tightened the definition. As a result, statisticalsignificance was achieved. However, Protara did not significantlyreduce heart attacks based on the looser definition.In addition, the second Phase III trial, which was an internationalstudy in 1992, did not produce a statistically significant result. Inthat study, the company blamed the outcome on problemsencountered in the design of the trial.The third Phase III trial was designed to confirm findings of thefirst U.S. study. In announcing the results Monday, the companysaid, "Although there were fewer incidences of heart attack, strokeand cardiac death in the Protara group vs. placebo, none of theresults were statistically significant."Foster said Gensia has a "second generation of ARA compounds" indevelopment that "may be more potent and have greater activitythan Protara." Among the potential indications are cardiovascularand inflammatory applications, stroke, epilepsy and pain.Foster also noted that Gensia has other products, including theGenESA system, which is in regulatory review in the U.S., Europeand Canada and Geomatrix cardiovascular drug deliverytechnology. The company also has programs associated with itsGensia Laboratories injectable generics subsidiary.Other Irons In The FireLast week, Gensia signed a potential $64.5 million deal withBoehringer Mannheim Pharmaceuticals Corp., of Gaithersburg,Md., to develop a cardiovascular treatment based on Geomatrixtechnology and nifedipine, the generic form of New York-basedPfizer Inc.'s Procardia XL. The agreement gave Gensia an initial$20 million in capital.GenESA combines the drug arbutamine and a computer-controlled,closed-loop drug delivery system, which is designed to aid indetection of coronary artery disease.Foster said that Gensia has $45 million in cash and another $35million with Aramed. She said that following a recent privateplacement of 1.5 million shares outside the U.S., Gensia has 31.6million shares outstanding. She said the current burn rate has notbeen calculated.Foster said no immediate changes have been made in the structureof Gensia. Hale said, "Based on the initial analysis of the [Protara]study, we will be re-examining our current spending levels and theallocation of the company's resources." For the quarter ending June 30, the company's burn rate was $18million. For the year ending June 30, Gensia had a net loss of $70million and with $43 million had cash to operate for seven months.Stover said, "Clearly [the Protara trials] are a major setback, butthere's significant value in the GenESA system. They're looking ata launch of GenESA in Europe in the first quarter of 1995 and inthe U.S. soon after. The clinical data on GenESA is all publishedand there are no problematic issues there. And with the [BoehringerMannheim] collaboration, we've seen a reflection of the Geomatrixvalue."Stover said he won't calculate a projected value for Gensia's stockuntil he gets a closer look at the most recent trial data, but he added,"Clearly the other product segments of the company have a valuethat is equal to or exceeds the value of the stock over the summer."That value, Stover said, was $10 a share.Geller was not as generous. He valued the stock at $3 a share,saying there are concerns about GenESA and the nifedipineproducts. He also noted that Gensia has a preferred shareholderobligation of $80 million, which would have to be met beforecommon stock shareholders realized any money from a buyout ormerger. n

-- Charles Craig

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