Cellcor Inc.'s shares shed 42 percent of their value on Thursdayafter the developer of living cell therapies said it had droppednegotiations on a joint marketing agreement with Critical CareAmerica (CCA), a network of infusion of clinics.
Cellcor of Newton, Mass., and CCA last January signed a letter ofintent to jointly market and deliver on a pilot basis Cellcor'sautolymphocyte therapy (ALT) for treating renal cell carcinomaat three CCA outpatient care centers. The two companies alsoplanned to explore joint development and marketing ofCellcor's proposed ALT for HIV-infected patients.
Cellcor said it is pursuing alternative marketing strategies "toincrease patient and physician access to the therapy." Its firstcommercial product, an ALT to treat metastatic renal cellcarcinoma, has been used to treat more than 3,000 patients todate.
Cellcor's stock (NASDAQ:CLTX) on Thursday fell $3.75 a share to$5.25 on trading volume of 332,400 shares, or about 6 percentof its shares outstanding. The company made an initial publicoffering last March, selling more than 2 million shares at $11each.
The anticipated synergy between Cellcor, which is developingtechniques to treat a patient's own lymphocytes (white bloodcells) with disease-fighting properties, and CCA, which couldpotentially offer infusion and other services to patientsundergoing ALT treatment, failed to develop during eightmonths of talks, according to Cellcor.
"As discussions progressed, it became evident that ALT forkidney cancer did not fit with CCA's marketing and productdevelopment strategies," said Richard R. D'Antoni, Cellcor'spresident and chief executive officer. "In addition, the AIDSprotocol, which would have been a key element of the potentialcollaboration, is still in preliminary stages."
"They were as interested in the AIDS part of the deal as therenal treatment," Harry W. Wilcox, Cellcor's chief financialofficer, said Thursday. Proposed written protocols for the ALTtreatment were prepared after the two companies reached atentative agreement last winter.
Cellcor expects to manage on its own a small clinical study ofALT to treat HIV-infected people. It operates three outpatientcellular therapy centers connected with hospitals in Boston,Atlanta and Orange County, Calif. Cellcor has had discussionswith most of the major infusion therapy networks, but it maynow want to keep its options open, Wilcox said.
"We're opening up our distribution model," he said. "We don'twant to limit ourselves to them (any one infusion therapynetwork) in any market." The parting with CCA was amicable,and Cellcor expects to work with CCA on individual cases in thefuture, he said
A 1990 study of Cellcor's ALT, published in the journal TheLancet, found that renal cell carcinoma patients treated withALT survived an average of 2.5 times as long as a controlgroup.
The company said its ALT is currently in three large Phase IIIclinical studies for renal cell carcinoma, including onesponsored by the National Cancer Institute that is comparingALT to a drug therapy of interleukin-2 in combination withalpha interferon. Cellcor hopes to start later this year a clinicalstudy of ALT to treat hepatitis B, Wilcox said.
For AIDS, Cellcor has proposed an ALT treatment that makesuse of lymphocytes donated by tissue-matched siblings. Anestimated 30 percent of HIV-infected individuals would havethe needed sibling donors, the company said.
-- Ray Potter Senior Editor
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