Fallout continued following RegeneronPharmaceuticals Inc.'s announcement ofdisappointing Phase III trial results of ciliaryneurotrophic factor (CNTF), with the filing of ashareholder class-action lawsuit against theTarrytown, N.Y., company.On Tuesday, the company's stock dropped 33percent when it said it would seek FDA approvalto modify and expand the study of its leadcompound, for the treatment of amytrophiclateral sclerosis (ALS), or Lou Gehrig's disease.The lawsuit, naming the company and itspresident, Leonard Schleifer, as defendants,alleged that Regeneron conspired to misleadinvestors when it reported on Sept. 7, 1993,mostly positive results from the Phase II trial.Regeneron's (NASDAQ:REGN) stock closedTuesday at $8.75 per share, down $4.38. It lostanother $1 per share Wednesday. And onThursday, it gained 38 cents per share to closeat $8.13.The lawsuit was filed in the Southern District ofNew York. The size of the affected class was notimmediately known, but the suit stated that thenumber is well into the thousands. This includesthose who invested in the company between lastSept. 7 and March 14. The complaint seeksdamages, legal costs, other relief and a jury trial.Paul Lubetkin, Regeneron's vice president,general counsel and secretary, told BioWorldthat his company has just secured outsidecounsel and it is too early to formulate aresponse to the suit. But he said the action wasnot entirely unexpected.When the stock price went down, a plaintiffsued us. Lawsuits often follow stock pricedrops, Lubetkin said. We intend to vigorouslydefend the company's position in court.In a Sept. 7 news release on Phase II results,Regeneron reported safety and efficacy datashowing that CNTF, administered at 30micrograms per kilogram, slowed the rate ofdeterioration in muscle strength by 72 percentand reduced the decline of lung function by 44 to69 percent in 12 patients, as compared to 14patients who received a placebo. The companyreported that all six doses used in the trialfrom 0.5 to 30 micrograms per kilogram weresafe and well-tolerated. The company also saidresults provided a strong basis for the Phase IIItrial of CNTF in ALS that already was under way.Regeneron on Tuesday said many patients inthe Phase III trial experienced side effects suchas weight loss and coughing early in the study.The side effects contributed to poorerperformance on muscle strength tests, whichwere the study's primary outcome measure. Fora while they (did) worse than placebos, saidFredric Price, Regeneron's chief financial officer.Another Regeneron spokesman said Tuesdaythat statistically valid and significant informationabout CNTF's potential safety and efficacy wouldbe impossible to determine without modificationof the study. The FDA has not yet decidedwhether to grant the company's request.Regeneron hopes CNTF will promote thesurvival of neurons in patients with ALS, a fatalneurodegenerative disorder characterized by thedeath of motor neurons. Patients becomeincapacitated due to loss of muscle strength andeventually die of respiratory failure.031894Regeneron
-- Jim Shrine Staff Writer
(c) 1997 American Health Consultants. All rights reserved.