While the stock market was punishing U.S. Bioscience stock onMonday, company executives revealed their options for gettingEthyol "back on track" at the Food and Drug Administration.
The stock (AMEX:UBS) lost 44 percent of its value, falling$13.75 to $17.75 in the wake of a decision by an FDA advisorypanel late Friday not to recommend approval of the treatmentfor toxicity associated with chemotherapy and radiationtreatment.
Dr. Phillip Schein, president and chief executive officer, said thecompany now is back to its original projection for Ethyol'sapproval in 1993.
U.S. Bioscience Inc. will meet with the FDA this month todetermine how to get the review "back on track," said RobertKriebel, senior vice president, finance and administration.
The company will use the meetings to decide whether topursue a narrow label indication for Ethyol as a treatment toreduce hematological toxicity associated withcyclophosphamide (CP), particularly hospitalization fromneutropenic fever and sepsis, Kriebel told BioWorld. The datasupporting this indication are "most advanced and compelling"compared with other clinical data, and could be ready to re-submit to the FDA after about six months, he said.
To facilitate approval of a narrow label indication after sixmonths, the West Conshohocken, Pa., company has reopened itspivotal clinical trial of 147 ovarian cancer patients, wherepatient deaths will make survival rates statistically significant.
The alternative is to wait for sufficient data to pursue abroader indication that includes reducing toxicity associatedwith cisplatin, including kidney, nerve and hearing toxicities.To facilitate a longer-range study, U.S. Bioscience plans to enroll53 new patients in the ovarian cancer trials by the end of theyear, Kriebel said.
"My guess is that they will go back before the advisory panellate this year or early next year," said Alex. Brown & Sonsanalyst David Webber. "I am projecting approval in the firsthalf of 1993, although I think it will be just for protectionagainst the toxicities of CP, which is a narrower label than I hadexpected before."
During a teleconference with analysts on Monday, Schein saidthe company had not requested the Jan. 31 advisory paneldate, and was surprised when it was notified in September thatan early date had been set. He said the White House Council onCompetitiveness may have pressured the FDA to accelerate thereview to demonstrate the agency's resolve to reform its drugapproval process. The highly publicized drug approval packageoriginated with the council and was announced by the Bushadministration at about the same time that the FDA scheduledthe Jan. 31 meeting.
"We had to rush, and the FDA had to rush the total databaserelated to Ethyol," he said. "We were a victim of this. I wouldhope that (the FDA) didn't purposefully set us up for a fall,"Schein said.
Many Wall Street analysts expected the panel to approveEthyol because the company's preliminary work and trial dataappeared good. Schein, a former FDA panel advisory chairman,is well-connected with the FDA, and the decision to acceleratethe review was seen as a positive sign at the agency, saidRobert Peterson, vice president of research for Hanifen, ImhoffInc. in Denver.
Although Ethyol is a "superb drug," Peterson said, the Jan. 31date forced the company to do an inferior job of preparing thedata.
"There is nothing wrong with the drug," agreed Webber. "Theproblem was merely that the data were not yet sufficientlyrobust."
Vector Securities International of Deerfield, Ill., said ittrimmed its earnings estimates to reflect a six-month delay inEthyol's launch to the first quarter of 1993. Based on a revised1994 earnings estimate of $2.75, Vector has lowered its 1992target price to $44 and is continuing to recommend aggressivepurchase of the stock.
Peterson rates the stock a "hold." Webber has not changed hisrecommendation because his earnings projection "suggests tome that the stock is worth $35 this year. With the stock now inthe high teens, it looks like a strong buy."
On Thursday, Marion Merrell Dow Inc. announced plans to sellits 6.6 million U.S. Bioscience shares, representing 17 percent ofshares outstanding. On Monday, Schein responded by saying,"It's not time for Marion Merrell Dow to sell shares. I hope theywould not act in a way that exerts any more pressure on thestock. Anything that would adversely affect the sales price ofthe stock at this time is not in its economic self interest."
On Monday, U.S. Healthcare Inc., which spun off U.S. Biosciencein 1987, announced that it intends to register and distributethe 6.7 million U.S. Bioscience shares it now holds to theshareholders of U.S. Healthcare Inc. in the form of a specialdividend.
-- Kris Herbst BioWorld Washington Bureau
(c) 1997 American Health Consultants. All rights reserved.