Chemex Pharmaceuticals Inc. on Wednesday said it hasreceived an "approvable" letter from the FDA for marketing itsfirst product, Actinex, a treatment for pre-malignant skinlesions.

The product, which was acquired in 1990 by Block Drug Co.Inc., will receive final marketing approval after inspection oftwo manufacturing facilities, Chemex said.

The Fort Lee, N.J., company received a $1 million milestonepayment from Block for the letter. According to Len Stigliano,Chemex vice president of finance, the company expects another$5 million between final approval and first shipment ofproduct to Block's Reed & Carnrick ethical pharmaceuticaldivision.

Chemex also will receive $1 million on the anniversary date ofthe first sale for two years, plus 5 percent royalties after thefirst $40 million in sales. The company already had received a$2 million advance against royalties in 1990.

Block has not yet set a price for Actinex, a topical treatment foractinic keratoses, or small skin lesions induced by excessiveexposure to the sun. If not treated, up to 20 percent of suchlesions can become cancerous.

Treatment has been limited to a topical drug sold by Roche andin-office surgery. Chemex estimates the market at $50 millionto $100 million annually, citing American College ofDermatology estimates of 5.5 million patient visits annually forthe condition.

Chemex has two drugs in the clinic. Amlexanox is in Phase IItrials to treat canker sores, and EPC-K1 is in Phase I tests forcontact dermatitis. The company plans to file this year for trialsof three other treatments for skin diseases.

The stock (NASDAQ:CHMX) closed at $5.50, down 25 cents. -- KB

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