Biotech Stocks Day-In-Review: Adherex Buys Out GSK Option

Adherex Technologies (ADH), a Canadian biotech focused on oncology, purchased options held by GlaxoSmithKline (GSK) on eniluracil, a cancer compound that failed a Phase III trial when it was administered as an adjunct to 5-FU chemotherapy.

Adherex in-licensed the drug after the setback, but until now, GSK held options to reacquire eniluracil. For $1 million, Adherex now owns the options; the rest of the in-license agreement, including milestones and royalties, remains as it was before. Eniluracil is aimed at making 5-FU orally active, with greater efficacy and fewer side-effects.

Adherex contends that an unexpected dose and schedule dependent drug interaction doomed the earlier trials. Adherex says that preclinical testing supports this hypothesis. A Phase I test is underway. Adherex slipped 2 cents lower to $.34.

DynPort Vaccine Company, a division of Computer Sciences Corp. (CSC), and Baxter Healthcare (BAX) began a Phase I trial for plasma-derived butyrylcholinesterase. Also known as "BioScavenger," the compound is expected to prevent and perhaps even treat the effects of chemical nerve agent exposure. In pre-clinical tests, the blood plasma protein butyrylcholinesterase inhibited toxicity from certain agents, including Sarin, Soman and VX. Computer Sciences moved up 52 cents to $55.75, and Baxter climbed 64 cents to $49.02.

GlaxoSmithKline [GSK] began a head-to-head test of Cervarix, its cervical cancer vaccine, against a competing vaccine from Merck (MRK), Gardasil. Gardisil has been approved by the FDA, while Cervarix remains in Phase III tests. GSK expects to file for approval of the vaccine in April 2007. GSK rose 52 cents to $55.75, and Merck was higher by 73 cents at $45.74.

Barrier Therapeutics (BTRX) reported positive results for a Phase II trial of Hivenyl. In the proof-of-concept test, Hivenyl significantly reduced itching that was related to atopic dermatitis, without producing any sedative side effects. Hivenyl is an oral formulation of vapitadine dihydrochloride, a novel antihistamine. Despite the positive report, Barrier fell 45 cents to end at $8.15.

MGI Pharma (MOGN) published data from a Phase III trial of Saforis Powder in UpTec for Oral Suspension, showing the drug significantly lowered the incidence of severe oral mucositis. Severe oral mucositis is a side effect of chemotherapy. The data were originally released at the 2004 ASCO meeting. In October 2006, the FDA issued an approvable letter for Saforis, but asked for an additional Phase III trial. So far, MGI Pharma has not announced its plans for the drug. MGI sank 19 cents to $17.32.

Alexza Pharma (ALXA), a member of the 2006 IPO class, has completed enrollment in a Phase IIa trial of ZA-004. The compound is a combination of loxapine, a well-known antipsychotic, and the Staccato system that turns a drug into an inhaled compound that takes effect more quickly than oral formulations. Because the present indication is acute treatment of agitation in schizophrenic patients, Alexza considers the use of the Staccato system a significant improvement. Results are expected in Q2 of 2007. Alexza slipped 11 cents lower to $10.08.

Biotech backed off from its recent string of new highs with a session that ended in negative territory. The Centient Biotech 200™ dropped 12 points to 4088, a loss of .31%. The S&P 500 was off by .31%, but Nasdaq fell a large 1.46%.

Disclosure: none.

Comments

[Jeffrey Todd_:]

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2007 Jan 19 05:11 AM