Shares of Alliance Pharmaceutical Corp. gained some ground after the San Diego-based biotechnology firm reported its oxygen subsitute product showed no benefit in patients with acute respiratory failure.
Alliance shares closed at $3.39 May 23.
On May 22, Alliance shares fell $1.11 after the firm announced the disappointing test results on LiquiVent, a liquid fluorocarbon designed to help people with acute respiratory distress syndrome breathe.
One biotech expert however, wasn’t moved.
“The announcement is no surprise,” said John McCamant, editor of the Berkeley-based Medical Technology Stock Letter. “This is not really a drug (and added) trying to create an oxygen substitute has always been a very tough row to hoe (for companies).”
Alliance has had its share of troubles this year.
In January, Alliance halted a heart-surgery trial with its flagship product Oxygent, which is a blood substitute. Weeks later the company announced it would continue development.
Based on the negative LiquiVent results, Alliance said it will no longer test it for acute respiratory distress syndrome.
Gwen Rosenberg, Alliance’s spokeswoman, said the firm will pursue the drug’s development in other areas.
Rosenberg said there will be no layoffs as a result of the suspension of the LiquiVent trials. Researchers working on LiquiVent will be assigned to other projects.
Some will be working on Alliance’s third product, an ultrasound agent called Imavist, developed in partnership with Berlin-based Schering AG.
Alliance applied for Imavist’s approval by the Food and Drug Administration in November 1999. In August 2000, the FDA responded by asking Alliance to submit additional studies.
Rosenberg said company officials met with federal regulators last November to “clarify their comments” and are now waiting for approval.
She anticipates Imavist will be approved by the end of this year.
If approved, Imavist is initially looking at a small market, Rosenberg said.
Separately, Alliance sent a proposal to the FDA with regards to further development of Oxygent and hopes to meet with federal agents in June or July, she said.
Rosenberg said Alliance wants to establish whether to pursue its ongoing cardiac surgery study or start an entirely new study , similar to a successfully completed European trial involving 492 general surgery patients.
Rosenberg said the second scenario is “more likely,” adding, “We are still interested in treating cardiac surgery patients.”
The agreement with Oxygent developmental partner Baxter Healthcare Crop. remains solid.
