Biotech: Oxygent Product Races to Be
First in $1.5B Market
For two decades, scientists’ attempts to create a viable artificial blood substitute that reduces the need for blood transfusions during surgery have seen discouraging results. In the mid-1990s, it appeared as if Deerfield, Ill.-based health care giant Baxter HealthCare Corp. held the key. But with the deaths of 24 patients during clinical trials, Baxter’s hopes to gain marketing approval for the first blood substitute turned to disappointment. Now Baxter’s hopes are high again. Together with Alliance Pharmaceutical Corp. of San Diego, Baxter is testing a milky white substance called Oxygent. Some experts believe Oxygent, made by Alliance, may win Food and Drug Administration approval for imitating the ability of red blood cells to carry oxygen to the body’s tissues.
Duane Roth, chairman and CEO of Alliance, said Oxygent is designed mainly to avoid the use of donor blood during surgery. As currently conceived, doctors take out about one-third of a patient’s blood just prior to surgery. Doctors then give Oxygent as needed during surgery. After the operation, patients are given back their own stored blood. Such “bloodless surgery” is likely to appeal to patients who fear the risk of contracting a disease through blood transfusions, and should also help blood banks that are low in real blood supplies.
Great Need
Roth sees a substantial marketing opportunity for Oxygent: Some 4 million patients undergo surgery in the United States each year that require two or more units of blood. So far, Oxygent has shown no major safety risks in clinical tests of more than 1,100 patients at 18 sites, Alliance said. Still, Toronto-based biotech firm Hemosol, which also developed an oxygen-delivering product, appears to be ahead of Alliance in clinical development.
Two other biotechs, Cambridge, Mass.-based BioPure and Evanston, Ill.-based Northfield Laboratories, are also racing to be first on the estimated $1.5 billion market for donor blood, reported Roth Capital Partners Inc.’s biotech analyst Fariba Ghodsian. Ghodsian believes Alliance’s Oxygent has a critical edge on the competition for various reasons. “Alliance is quite well-situated,” Ghodsian said. For one, Alliance has a powerful partner in Baxter that can help fund the costly clinical trials, provide clinical expertise and quickly introduce Oxygent in hospitals throughout the United States, Canada and Europe, if it is approved.
Substantial Support Their rivals lack such corporate support, she said. Gwen Rosenberg, a spokeswoman for Alliance, said Baxter has paid Alliance $25 million in royalties as part of their agreement to create a separate entity to oversee the development and marketing of Oxygent. Another $30 million will follow by March 2001, and that’s not contingent upon approval of Oxygent, she said. Secondly, Ghodsian said, Oxygent is unique, because it is made of inexpensive, easy-to-make fluorocarbons. BioPure, Hemosol and Northfield compete in hemoglobin-based products which isolates the oxygen-carrying pigment in red blood cells from bovine or outdated human blood, then process it for use in surgeries, she said. Hemoglobin-based substitutes cost more to make and have shown side effects in the past: Baxter’s HemAssist, a hemoglobin-based substitute, failed during clinical trials, causing patients’ blood pressure to rise dramatically. Of the 52 trauma patients who received HemAssist, 24 patients died. Europeans are likely to be critical of a substitute made of cow’s blood, with the recent furor over mad cow disease, Ghodsian said. Oxygent, by contrast, runs no risk of spreading disease, she said. In surgery, the fluorocarbon delivers oxygen even faster than the blood’s own hemoglobin, Alliance said.
On the downside, Oxygent lasts between 11 and 20 hours in the blood; hemoglobin-based artificial blood lasts up to 36 hours in the body, Ghodsian said. However, 11 hours is sufficient for most surgeries, she said.
Alliance hopes to file for European regulatory approval during the first quarter of 2001 and gain marketing approval in early 2002. In the United States, Alliance plans to file an application during the third quarter of 2001, Rosenberg said.
Conclusion Of Testing
Much of Alliance’s success will depend on the results of a finished Phase III trial of 490 patients that will be released next month, Ghodsian said. The study began in November 1998. One year later, an independent data safety monitoring board found no safety issues and let the trial proceed, she reported.
A 600-patient, late-stage trial using Oxygent during cardiac surgery is ongoing, Rosenberg said. She expects results to be released during the first quarter of 2001. Dr. Tony Melaragno, medical director and CEO of the San Diego Blood Bank, remains cautiously optimistic. A blood substitute could reduce the need for blood donors and provide a safe alternative to blood transfusions, he said.
Donated blood is good for 42 days, but less than 5 percent of eligible blood donors in San Diego give blood, he said. Oxygent has a two-year shelf life and runs practically no risk for contamination. HIV, the virus that causes AIDS, is still transmitted in about one in every 676,000 transfusions; hepatitis C is transmitted once in every 100,000 transfusions, he said. While the cost of Oxygent is yet to be etermined, Roth has said a successful blood substitute would have to sell at or around the price of blood.
Presently, one unit of blood costs $140, said Melaragno. Dr. Thomas Lane, medical director of transfusion service at the UCSD Medical Center who consulted Alliance on Oxygent in the early ’90s, said blood substitutes will have a place in surgery, but won’t replace blood any time soon. Substitutes cannot provide clotting support through plasma and platelets needed during massive surgery. They are also short-lived. He added regulators will be very careful in evaluating whether a blood substitute is safe and effective. And once that’s proven, doctors are bound to bring it into their operating rooms, too, he said.