Xoma Corp. announced Thursday that the FDA has saidadditional clinical testing may be warranted for Xoma's E5 anti-endotoxin monoclonal antibody, used to treat septic shock. Thecompany said it hasn't been told what more would be neededto get E5 approved.
The company's stock (NASDAQ:XOMA) plunged $4.75 per shareon Thursday to close at $15.25. It was the heaviest tradedNASDAQ issue, with nearly 3.9 million shares changing hands.
Xoma in a five-sentence press release said the decision wasunexpected. "Our ongoing interaction with the FDA appeared tobe going in a positive vein," said company spokeswoman CarolDeGuzman. "We're going to meet with them next week todiscuss our next step."
Xoma has completed two multicenter, randomized, placebo-controlled studies of E5. The FDA refused to approve E5 inApril based on data from the first study. Data from the secondstudy was the basis for the FDA decision disclosed Thursday.
Xoma said the FDA did not cite any concerns with preclinical,manufacturing/control or safety issues. "We have provideddetailed analyses on resolution of organ failure, but we feel theFDA did not fully appreciate the information," DeGuzman said.
Prudential-Bache analyst Joseph Edelman in New York said theFDA's decision dealt the company a major setback. "It's going tobe several years before the company is profitable," Edelmansaid.
He said E5 has lost the competitive battle with rival CentocorCorp.'s Centoxin, another treatment for septic shock. "I thinkCentocor has a much better product," Edelman said. "But theystill have a long road ahead of them before the FDA gives themapproval. It could be 1.5 to 2.5 years."
Robert Kupor, an analyst with Kidder, Peabody in New York,said the FDA's decision may kill the product. "I believe E5 willbe terminated at this point," Kupor said. He said that if the FDAdemands another Phase III trial, Xoma may decide thecommercial value of the product is too little to continue. Kuporsaid the drug addresses a small patient population. He addedthat he didn't think Xoma would be profitable until at least1995.
Kupor said that the FDA's decision means Centoxin has lost itsprimary competition. "But I don't think it will have too mucheffect on Centocor. Centoxin has been used to treat patientswho are in later stages, patients who are in shock. The mainfocus of E5 is to treat patients who are in the early stages, orpre-shock."
Cowen & Co. analyst David Stone in Boston was less pessimisticabout the E5 situation. "There was some substantial hope forapproval for this year," Stone said. "Now it seems the FDA willrequire new clinical trials," he said. "The window ofopportunity for first-generation sepsis (products) is closing, ormay have closed completely." Stone said E5 could still receiveapproval, but that Xoma would have to assess the product'svalue, given the longer road to possible approval.
-- Steve Payne BioWorld Staff
(c) 1997 American Health Consultants. All rights reserved.