The start of a planned clinical study of macrophage colonystimulating factor (M-CSF) in reducing cholesterol will likely bedelayed as a result of questions raised by the FDA, GeneticsInstitute Inc. and its research spinoff, SciGenics Inc., saidMonday.

Genetics Institute of Cambridge, Mass., said it has responded tothe FDA, which will likely need time to further review thepreclinical data the company submitted. GI and SciGenics, alsoof Cambridge, did not disclose the specific nature of the FDA'squeries.

It was the second recent cautionary note that Genetics Institutehas issued regarding development of M-CSF, a white blood cellgrowth factor that GI has also taken into clinical trials as apotential therapeutic against infectious diseases and cancer. Instudies involving its use with about 150 cancer patients, GIpreviously said M-CSF had shown "no significant overall clinicalresponse."

"Genetics Institute can make no assurances as to whether orwhen it will be able to proceed with studies of M-CSF incholesterol lowering," according to Monday's announcement. GIhad hoped to start those trials this summer, according to a GIspokeswoman. Perhaps more importantly, GI stated that it"does not expect that M-CSF will enter large-scale pivotalclinical evaluation in any indication before mid-1993."

Both Genetics Institute and SciGenics stocks slid on Monday. GI(NASDAQ:GENIZ) declined $2 a share to close at $28.75.SciGenics (NASDAQ:SCGN) fell $2.12 a share to close at a newlow of $10.88.

The setback with M-CSF appears to hold more seriousconsequences for SciGenics, which made M-CSF its sole near-term product prospect. SciGenics, which was spun off from GIin May 1991 in an initial public offering that raised $42million, is also working on early-stage research into embryonicgrowth and regulatory proteins (EGRP). Its stock, which hastraded as high as $21.75 a share in the past 52 weeks, closed at$16.63 a share just two weeks ago.

David Stone, an analyst with Cowen & Co. in Boston, said theFDA delay is noteworthy only because of its "unfortunatetiming," coming on the heels of GI's more significant report onthe lack of response to M-CSF. "Routine setbacks shouldn'tmuch matter," he said. Stone maintains his view that GI stock isstill attractive.

GI has an option to reacquire rights to M-CSF, or to call forredemption all SciGenics stock at any of a series of escalatingprices. American Home Products Corp., in turn, last year agreedto acquire a 60 percent stake in GI, with an option to acquirethe rest at graduated prices through 1996.

GI said that several new studies of M-CSF against cancer areunder way, but "if these new studies do not show promisingresults, it is likely that Genetics Institute will cease to explorethe potential uses of M-CSF in the field of cancer therapy." Aclinical trial of M-CSF to treat infectious diseases associatedwith AIDS is just getting under way.

Chiron Corp. of Emeryville, Calif., which is developing M-CSF aspart of its acquired legacy of Cetus Corp., is conducting a PhaseII trial of M-CSF for treating fungal infections in cancer andbone marrow transplant patients.

"We're quite enthusiastic about the potential of M-CSF incombination with other agents," said Chiron spokesman LarryKurtz. Chiron's clinical study has used M-CSF in combinationwith the anti-bacterial agent Fluconazole.

GI and Cetus, before its 1991 merger with Chiron, cross-licensed each other's patents to M-CSF.

-- Ray Potter Senior Editor

(c) 1997 American Health Consultants. All rights reserved.

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