In perhaps a partial moral victory in a continuing fight againstits detractors, Epitope Inc. received regrets from federalofficials for releasing an agency's reports about one of thecompany's proposed products.

Epitope of Beaverton, Ore., said last week that copies of FDAreports related to its Orasure HIV-1 device for detecting theHIV infection have caused its stock to fall in price. Itmaintained that the reports showed preliminary data andreferred to problems that were subsequently corrected.

"We have concluded that the release of the EIR (establishmentinspection report) was premature," Amanda B. Pedersen, theFDA's chief mediator and ombudsman, wrote in a letter datedJune 23 to Adolph J. Ferro, Eptope's president. "We regret thatthe release of the EIR, which occurred prior to its evaluation byofficials of the Center for Biologics Evaluation and Research,may have caused confusion among persons outside of theagency about the status of your product."

Epitope released the FDA letter late Wednesday.

The FDA's letter is in response to repeated telephone inquiriesand an attorney's letter written to the agency on Epitope'sbehalf.

Orasure, a saliva test for the HIV virus, is under review at theFDA, although it is sold in Canada and a few other countries.

Pedersen said that disclosure of such records falls within thediscretion of the FDA commissioner, but that "it is (the) FDA'spolicy to deny requests for release of an EIR until the agencyreview is completed and the matter is closed."

The FDA's EIR reports about Epitope's OraSure from lastNovember, December and April were released in response to arequest filed under the Freedom of Information Act, Pedersenwrote. Under that act, the FDA can deny public access to EIRsbecause they are "both an intra-agency memorandum and partof an investigatory file" and "not a simple list of factualobservations." She said the agency is taking steps so that FDApersonnel do not release EIRs "under these circumstances."

The FDA reports have been making the rounds of brokeragefirms and news media, including BioWorld. Even before thecontroversy stirred up by disclosure of the reports, thecompany's stock is thought to have come under pressure fromshort sellers. They are investors who effectively borrow sharesof a certain stock they expect will decline in price. They hope toprofit by selling the borrowed shares and later purchasereplacement shares at a lower price.

Epitope's stock (ASE:EPT), which has traded in a 52-week rangeof $14.38 to $27.50 a share, closed Wednesday at $15.50 ashare, down 25 cents for the day. -- Ray Potter

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