The board of directors at Alpha 1 Biomedicals Inc., responding toThursday's 68 percent drop in the company's stock price followingnegative trial results, adopted a plan on Friday that would make anunfavorable takeover of Alpha 1 extremely unlikely.The Shareholder Rights Plan becomes exercisable if any person orgroup acquires more than 25 percent of Alpha 1, which on Thursdayreleased preliminary results of its Phase III trial of thymosin alpha 1 fortreating chronic hepatitis B. The company said its lead drug andplacebo showed about equal responses in the 99-patient trial, meaningmore testing is needed before a new drug application could be filed.(See BioWorld Today, April 29, 1994, p. 1.)The shareholder plan, or poison pill, is in response to the purchase ofabout 15 percent of Alpha 1 stock on Thursday by licensee SciClonePharmaceuticals Inc., which said its intention was to buy no more than20 percent interest in Alpha 1.The plan, through a dividend distribution of one preferred stockpurchase right on each share outstanding, would allow all stockholders,other than the buyout group, to purchase Alpha 1 stock at half themarket value. That would dilute the stock to the point that it would nolonger be attractive to the buyer."It's not a plan to prevent acquisition of the company," VincentSimmon, president and CEO of Alpha 1, told BioWorld. "It's a plan toprevent acquisition of all or part of the company under terms that theboard deems not favorable to all shareholders."Simmon said a cash offer deemed fair by the board, or a buyer makinga fair offer in direct negotiations with the board, could supersede theshareholder rights under the plan.Thomas Moore, SciClone chairman and CEO, repeated on Friday thatthe company has no intention of buying more than 20 percent of Alpha1, which would subject the company to different securitiesrequirements."Our intention was just to have an ownership position in the companythat was significant so we could be able to ensure that we had a littlemore influence," Moore told BioWorld. `We're interested in thedevelopment of thymosin alpha 1. We just think it could be managedbetter on a worldwide basis if it was coordinated more effectively."SciClone (NASDAQ: SCLN), of San Mateo, Calif., has exclusivemarketing rights in areas with the vast majority of those with infectedwith the chronic hepatitis B virus _ all areas other than NorthAmerica, Europe, Korea and Israel. It already has market approval forthe drug in Singapore, where it intends to launch the drug, under itsbrand name Zadaxin, in the fourth quarter of this year. SciClone also isexpecting approval soon in Hong Kong and the People's Republic ofChina.SciClone, whose stock dropped 59 percent Thursday and wasunchanged Friday, also was granted manufacturing rights by anarbitrator who ruled on April 8 that Alpha 1 breached its obligation assole supplier to provide commercial quantities of the drug.Moore said if further analysis of the Alpha 1's trial data shows it to bea fair study, SciClone would take another look at the merits of the drug.But he said a number of previous trials resulted in a "body of evidencethat point to the fact that the drug has a therapeutic use."Simmon, while saying the study data were too preliminary to release,affirmed Alpha 1's belief that the number of people losing viral DNAin the placebo and treatment group were about the same."We were very shocked, and surprised," Simmon said. "We expectedoverall a lower placebo number of people who would lose viral DNA,based on the design of the trial and the entry criteria. We have noevidence that anything (in the trial) was done wrong."Alpha 1 (NASDAQ:ALBM), which fell from $6.19 to $2 Thursday,was unchanged Friday.050294ALPHA1
-- Jim Shrine
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