Spurred by a negative press report concerning the drug Isoprinosine, nervous investors Monday jettisoned tens of thousands of shares of Newport Pharmaceuticals International Inc., knocking the price of the already-battered stock down by more than 18%.
Company officials said the article, in Monday’s edition of the Wall Street Journal, misconstrued statements made at Newport’s annual meeting last Friday.
The article said the Newport Beach drug maker is “reevaluating” plans to study the use of its proprietary drug Isoprinosine as a potential treatment for AIDS because another company’s medication already is being made available to AIDS patients on a limited basis.
But Newport officials said Friday--and reiterated Monday--that they intend only to reevaluate the method of testing and that they still plan to pursue use of Isoprinosine as an AIDS treatment.
After publication of the Journal’s article, Newport’s common stock fell $1.125 to $5 a share on volume of 285,000 shares traded.
On Monday, J. Roberts Fosberg, Newport’s recently installed president and chief executive, reiterated his statement, made at Friday’s annual meeting, that Isoprinosine’s best chance of winning federal approval is as a treatment for pre-AIDS, a series of symptoms which frequently precede the disease itself.
“We are not going to abandon it,” Fosberg said in an interview Monday. “That’s just not the case.”
The Food and Drug Administration in February rejected Isoprinosine as a treatment for pre-AIDS, citing inadequate testing.
However, Newport recently announced plans to begin new trials of the drug on 2,000 patients. Company officials said they hope to use the data in a new attempt to win FDA approval.
Although a company spokeswoman was quoted Monday as saying that the wider availability of the drug azidothymidine, or AZT--made by Burroughs Wellcome Co.--will make it “more difficult” for Newport to recruit patients for the new trials, Fosberg said the company hopes to begin testing within the next three months.
Moreover, Newport is considering testing Isoprinosine in conjunction with anti-viral agents--possibly including AZT.
Jim McCamant, editor of the San Francisco-based Medical Technology Stock Letter, said Monday’s article in the Journal “clearly was what caused the stock to go down.”
Although he said he expects Newport’s share price to rebound eventually, McCamant indicated that because the issue has been hit hard this year--it declined by more than 50% following the FDA’s rejection of Isoprinosine for domestic use--it will take “a few days” for investors to lose their nervousness.