MGI Pharma Inc. announced Thursday that it is abandoning allefforts to develop its MGI 136 chemoprotective agent.

The company's decision to halt Phase III trials of the drug inearly February helped precipitate the extended sell-off ofbiomedical stocks. A week prior, the FDA turned down U.S.Bioscience Inc.'s Ethyol chemoprotective agent after approvalhad been widely predicted.

The February announcement sent MGI's stock (NASDAQ:MOGN)tumbling from $22.38 to $10.75. It closed Thursday down$1.50 at $8.

MGI halted its trials because MGI 136 seemed to decreasetolerance of chemotherapy. On Thursday, Kenneth F. Tempero,chairman and chief executive, said subsequent analysis"confirmed" that patients on the drug appeared to tolerate thetherapy less well.

MGI on Thursday also reported an increased net loss for thefirst quarter ended March 31. The company lost $2.6 million, or23 cents per share, compared with a loss for the 1991 quarterof $1.6 million or 20 cents per share.

Revenues declined to $1.4 million from $2.3 million, quarter toquarter, reflecting increased competition in the hypercalcemiamarket, which affected product sales of Didronel I.V. Infusionand co-marketing revenues related to Didronel oral tablets.Didronel is an intravenous infusion for treating hypercalcemiaof malignancy.

Product sales decreased to $884,176 from $1.2 million. "Weanticipate sales of Didronel I.V. Infusion will be down for theyear due to the additional competition," said Tempero.

MGI is pinning its hopes on Salagen, which has orphan drugdesignation for treatment for radiation-induced dry mouth inhead and neck cancer patients. The company, which estimatesthe U.S. market at $100 million, filed for FDA marketingapproval in February.

The Minneapolis company is preparing to begin Phase IItesting of MGI 650, an ammonia scavenging agent, and MGI330, to enhance thallium imaging of the heart to detectcompromised, but still viable, tissue.

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