AIDS Vaccine Maker’s Stock Drops Sharply
Shares of Immune Response Corp. closed down 25.5% Wednesday after a Food and Drug Administration panel dampened hopes for a quick approval for the biotechnology company’s AIDS vaccine now in clinical tests.
The setback came even as the FDA announced guidelines intended to speed the approval process for new drugs, which can take up to 12 years.
Immune Response stock fell $15.75 to close at $46 a share in over-the-counter trading, where it was the most active issue.
An FDA panel said it would not consider an AIDS drug successful merely because patients in clinical testing show an increase in white blood cells--called T-cells--which are typically the first to be attacked by the disease.
The panel also heard discussion from statisticians that raised doubts whether Immune Response is testing enough patients for a long enough period.
Although the discussion did not criticize Immune Response’s drug or its trial design specifically, the talks raised doubts that the FDA might accelerate the approval of drugs such as Immune Response’s. The company and some analysts had predicted that an FDA approval could come as early as 1993.
Denise Gilbert, a biotechnology analyst with Smith Barney, Harris Upham & Co. in San Francisco who attended the FDA discussion, changed her rating of the Immune Response stock to avoid from buy on Wednesday, a switch seen as largely responsible for the drop of the stock.
In her report Wednesday, Gilbert said that, based on the FDA discussion this week, there is now a “high risk” that Immune Response’s current clinical trial design is insufficient for FDA approval. The company may need to perform an additional trial, the risk of which “has not been factored into the current stock price,” Gilbert wrote.
Investor optimism for the Immune Response vaccine, which it is developing in a joint venture with Rhone-Poulenc Rorer, sent Immune Response shares rocketing as high as $62 in recent weeks from a January low of $2.75.
Immune Response spokesman Steve Basta said Wednesday that the company’s plan all along has been to present other data in addition to T-cell markers that, taken together, would earn the company an HIV vaccine product license.
Immune Response and Rhone-Poulenc Rorer are now conducting a double-blind test in nine medical centers involving 103 HIV-positive patients. Half are receiving the Immune Response vaccine, which is based on a concept developed by Jonas Salk, and half are receiving placeboes. The tests are slated for completion by September.
The FDA ruling sent other stocks reeling Wednesday. Rhone-Poulenc Rorer shares were down $2.75 to $55.75, Synergen fell $6.125 to $59.875, Medimmune lost $2.25 to $51.25, and Immunex slipped$2 to $56.75.
