Epitope Inc., following instructions from the Food and DrugAdministration, on Monday said it is ceasing distribution of itsOraSure collection device for a saliva-based AIDS test.

The company and the FDA's Center for Biologic Evaluation andResearch agreed Monday to a meeting, but no firm date hasbeen set, said Gilbert Miller, Epitope's chief financial officer.

Stock of the Beaverton, Ore., company (AMEX:EPT) fell $3.50 onMonday, closing at $15.

The company has shipped hundreds of thousands of collectiondevices to its distributor, Home Office Reference LaboratoryInc. (HORL) of Lenexa, Kan., said Andrew Goldstein, senior vicepresident of product development at Epitope. OraSure sales forthe third quarter ended March 31 were just under $700,000.

On Friday, both Epitope and HORL received letters from the FDAstating that they were in violation of the Federal Food, Drugand Cosmetic Act for failure to obtain marketing approval forOraSure prior to its commercial distribution.

The letters said Epitope and HORL were incorrect in theirbelief that the FDA would not regulate in-vitro tests usedexclusively for the insurance industry. In separatecorrespondence with the FDA in May, each company had arguedthat products used by the insurance industry to determineevidence of behavior, such as smoking, are not regulated.Insurers have used the tests to screen insurance applicants.

The FDA gave the companies three working days to notify theFDA in writing of the steps they had taken to remove OraSurefrom the market.

"There are a number of ambiguities in the FDA's letter whichneed to be clarified," said Goldstein. "Our attorneys tell uswe're legally able to distribute this product to the insuranceindustry. The insurance industry tells us the FDA has nojurisdiction because the definition of a medical device is fordiagnosis or mitigation of disease. That is not what this testis being used for; it's a screen."

"It's been our understanding in the past -- and we havedocuments from the FDA to back that up -- that the FDA wasn'tinterested (in this area)," said Bill Roberts, executive vicepresident of operations at HORL. "This recent round indicatesthat maybe with HIV testing it's different."

Roberts said HORL hadn't yet set up an appointment with theFDA.

Epitope filed for FDA marketing approval of OraSure in May.The FDA is required to review the application within sixmonths, but there is no deadline for a final decision, saidGoldstein.

-- Karen Bernstein BioWorld Staff

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