Trading in the stock of U.S. Bioscience Inc. was halted onTuesday because of an order imbalance. The stock closedMonday at $8.75, down 50 cents.
Analysts at Alex. Brown lowered their rating on the stock(ASE:UBS) on Tuesday to "neutral" from "strong buy."
The analysts, David Webber and Angeli Kolhatkar, based theirrecommendation on a report in the July issue of The CancerLetter. According to the report, the Oncologic Drugs AdvisoryCommittee of the FDA will delay approval of Ethyol, thecompany's lead product.
The newsletter reported that the FDA committee in a closedsession referred to studies suggesting that Ethyol protectstumor tissue from chemotherapy and radiotherapy. It also saidthat the committee turned down Zinecard from AdriaLaboratories for that reason.
U.S. BioScience countered by saying that the newslettercontained inaccurate information and that the chairman of thecommittee reported a consensus that Ethyol had significantlyreduced toxicity in an ovarian cancer study, specifically as itwas related to neutropenic fever.
The company said the Cancer Letter review may have involvedisolated reports in older literature of Ethyol uptake in somerodent tumors, but that to its knowledge no data suggestedthat Ethyol blunts the anti-tumor effects of chemotherapy inpatients.
The Alex. Brown analysts said that the FDA will probablydemand more proof of Ethyol's efficacy, and that the next FDAmeeting is unlikely to occur within a year. They said thatbecause the stock will therefore probably not outperform themarket within their six- to 12-month rating horizon, a "strongbuy" rating is no longer appropriate.
But another analyst, Patricia Lea of Vector SecuritiesInternational, said she would continue to recommendaggressive purchase of U.S. Bioscience stock because theissues surrounding Ethyol are "old news." She said thatZinecard and Ethyol are not chemically related.
Lea said she remains convinced that the new drug applicationfor Ethyol will still be submitted in early 1993 and will beapproved in "a reasonable time frame."
"I continue to have faith in (U.S. Bioscience) management andits integrity," she said.
-- Tom Lacey BioWorld Staff
(c) 1997 American Health Consultants. All rights reserved.