Alliance Suspends Study; Shares Fall 68%

Alliance Pharmaceutical Corp. shares lost more than two-thirds of their value after the company said it had suspended a trial of its experimental blood substitute product. The San Diego-based company said the trial was stopped because surprisingly few strokes were seen in a control group of cardiac patients not receiving the Alliance product. The company said the data might be a statistical fluke and said it hoped to resume the trial. Alliance shares fell $5.12, or 68%, to close at $2.38 on Nasdaq. The biotech company is co-developing the blood substitute with Deerfield, Ill.-based Baxter International Inc. Alliance had been conducting a Phase III study of its blood substitute, Oxygent, in cardiac patients undergoing coronary artery bypass grafting procedures. The 600-patient study was designed to compare results between a control group of patients receiving real blood and a treatment group receiving Oxygent, the only blood substitute in clinical development formulated from a synthetic raw material. Alliance said the number of adverse events, particularly strokes, in the control group was “remarkably low, causing a disparity in the proportion of adverse events between the treatment and control patients.” It said it had voluntarily suspended enrollment in the Phase III study.