Frustrated Wall Street analysts expressed dismay at CentocorInc.'s handling of its announcement on Wednesday that theFDA has requested more information on Centoxin.

The stock (NASDAQ:CNTO) closed down $8.13 on Wednesday at$33.13 after the company said the issues raised by the FDA, ifnot resolved satisfactorily, "could have a material adverseeffect on the application and the company."

The Malvern, Pa., company would not provide details about thenew request for information about the anti-sepsis drug, whichthe FDA told BioWorld was dated Feb. 10. Centocor's reticenceangered and worried institutional investors, said JefferyHolmes, vice president of institutional sales at VectorSecurities.

"It is very unusual to make this kind of release and not followup with some kind of conference call to analysts and clients,"said Holmes. "Even institutional clients haven't been able to getsomething from the company, and they are angry."

"It is worrying because Centocor is not commenting on theissues the FDA raised," said Kidder Peabody analyst Mary AnnGray. "There has been a lot of wild speculation."

Jay Silverman of Nomura Research, noting that Centoxin wasthe "flagship product of 1992" for many analysts, said, "Itsstatus is indeterminate now." Final marketing approval for thedrug had been widely anticipated after an FDA advisorycommittee in September recommended approval of thecompound for treatment of gram-negative bacteremia or septicshock.

"It is terrible news for the industry," said Silverman. "Thewhole group was waiting for the approval of antibodies forsepsis, particularly Centoxin."

"This is the third piece of bad information in the last fewweeks," said Gray. "First of all we had U.S. Bioscience, then lastweek MGI Pharma and this week disappointing FDA news forCentocor. We already had a sector rotation under way wherepeople were swapping out of medicals to cyclical stocks. Thestocks were already under pressure."

Kidder, Peabody analyst Robert Kupor on Wednesday lowered hisearnings estimates for Centocor based on the announcementand the prospect for label indications limited to patients whohave already gone into septic shock.

Kupor lowered his sales estimates for the United States andEurope to $285 million in 1992 from $340 million and to $490million in 1993 from $550 million. He lowered his earnings pershare estimates to 25 cents for 1992 from 60 cents and to$1.35 for 1993 from $1.80.

Centocor's earnings report, also released Wednesday, showedthat the company's product sales climbed to $44.3 million inthe year ended Dec. 31 from $32.8 million in 1990. But thecompany lost $195.6 million, or $5.72 a share, compared with aloss of $132.2 million, or $5.10, in 1990. The 1991 resultsincluded a $70 million pretax charge.

Even if Centoxin is approved, it will have a limited life,according to Dr. Mitchell Fink, director of surgical critical careservices at Massachusetts General Hospital in Boston and aninvestigator in the human clinical trials of Centoxin andSynergen Inc.'s Antril IL-1 receptor antagonist.

"The treatment effect for Centoxin is not overwhelming, and itis evident only in a very select subset of patients -- only gram-negative bacteremia and maybe only those who are gramnegative and in shock," he told BioWorld. "There are competingconcepts that seem to have a broader applicability and arelikely to be more effective. So I think the long-term viabilityfor Centoxin is not very good."

Fink said preliminary results from NIH-sponsored trials ofibuprofen for treating septic shock are promising. He also citedanti-TNF antibodies being developed by Affymax N.V.(NASDAQ:AFMXF), Cutter Biologicals/Miles Inc. and Synergen(NASDAQ:SYGN). "There are several other forms of anti-endotoxins, other approaches for binding endotoxins, at variousstages of development that are a lot more promising thanantibodies," Fink added.

Centocor on Tuesday sued Xoma Corp., its rival in the marketfor anti-sepsis MAbs, alleging that the manufacture and use ofXoma's E5 by the Berkeley, Calif., company and its marketingpartner, Pfizer Inc., infringe a patent Centocor received lastOctober.

Xoma, which in October won its own patent suit againstCentocor, has been "aware of the patent for some time," saidspokeswoman Carol DeGuzman. "The issuance of the patentdoes not change our plans for development of E5." Xoma stock(NASDAQ:XOMA) closed down $1 at $22.50.

-- Steve Usdin BioWorld Washington Bureau

(c) 1997 American Health Consultants. All rights reserved.