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Local drugmaker's product, NeutroSpec, is off the shelf

Dec 20, 2005 |

A key product used by doctors in diagnosing cases of appendicitis and the first product to emerge from the labs of Palatin Technologies was pulled from the market yesterday after the U.S. Food and Drug Administration said it should not be administered until it is better understood.

That request followed two deaths and a number of severe reactions possibly related to use of the product.

NeutroSpec held promise in that it reportedly could dramatically speed up the diagnosis of hard-to-recognize cases of appendicitis, and sales of the product since its launch in September 2004 seemed to bear that out.

The product, which includes radioactive material that is detected by imaging equipment, also promised to aid in the detection and diagnosis of other types of infections.

This month, that upward momentum faltered as Palatin first acknowledged the two deaths and other severe reactions by patients with heart problems who used the product for purposes other than the diagnosis of appendicitis, the only FDA-approved use.

Yesterday, Palatin said it was pulling the product to investigate the possible link between NeutroSpec and the patients' reactions.

The announcement to voluntarily recall the product follows a turbulent period for the drug industry, which has weathered a series of product recalls, including that of Vioxx by Merck & Co.

Palatin's stock price fell yesterday by 60 cents per share, from $3.45 to $2.85, a 17.4 percent drop.

In a conference call with analysts yesterday, Palatin executives said they foresee a positive outcome from a meeting with an FDA advisory panel early next year that could allow NeutroSpec to go back onto the market.

"We believe that this decision will be temporary and will have a limited impact on our operations," said Palatin CEO Carl Spana.

The executives also project a bright outlook for PT-141, a nasal spray that is being tested in clinical trials to treat both male and female sexual dysfunction.

NeutroSpec is being marketed and distributed with Tyco Healthcare Mallinckrodt, which made the decision along with Palatin to withdraw it.

Palatin, which has 81 employees, developed NeutroSpec to detect hard-to-diagnose cases of appendicitis. The product includes an antibody and a radioactive substance that attach to infection-fighting white blood cells and are detected by imaging equipment.

The product was approved by the FDA in July 2004 and went on sale two months later. From then until Sept. 30 this year, there were $9.8 million in net sales of NeutroSpec, which was administered to more than 11,000 patients.

Palatin projects that it will have $2 million more in revenues between Oct. 1, 2005, and June 30, 2006, than it will have in expenses - assuming the product comes back on the market.

The two patients who died both had severe heart problems. All of the severe reactions occurred when doctors gave the patients the product for "off-label" uses not approved by the FDA.

Palatin and Mallinckrodt believe there were options other than recalling NeutroSpec, such as providing labeling with more restrictions on its use, more education and a new risk-management plan, Spana said. The companies sent a letter to doctors Nov. 30 that provided more information about how to use the product.

The FDA decided to ask for the recall Dec. 15 after reconsidering the risks and benefits of NeutroSpec and determining that there should be more review of the relationship between the product and the adverse effects.

Asked in a conference call whether the FDA has been particularly aggressive in the wake of the Vioxx recall, Spana agreed.

"Their tolerance for risk is very low," Spana said.

Some companies have been changing their approach to FDA approval, with Pfizer and Bristol-Myers Squibb Co. both offering more extensive plans to monitor drugs after their approval.

Experts said the trend is likely to become entrenched in an environment of heightened concern about drug safety.

"I think this will be the norm," said John LaMattina, president of Pfizer Global Research and Development. "When you have something new there is the theoretical potential for harm."

Merck's withdrawal of Vioxx last year continues to cast a pall over the industry. It showcased that no drug is completely safe and that side effects may not manifest themselves in clinical trials with several thousand people but may when taken by millions.

If it is again approved for use, NeutroSpec may be expanded to uses other than detecting appendicitis. Spana said there is a clear benefit to its detection of osteomyelitis, an infectious inflammation of the bone and bone marrow.

Palatin must have cash to promote PT-141 if it is approved and has not yet reached profitability. Spana said that the NeutroSpec recall will not affect company projections for reaching either of those goals.

King Pharmaceuticals Inc. has a $250 million deal with Palatin to jointly develop and sell PT-141.

Palatin, previously named Rhomed, was restructured, renamed and moved to central New Jersey in 1996 after being started 10 years earlier.

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