Nexell Stock Triples as FDA OKs Orphan Drug

Nexell Therapeutics Inc. shares more than tripled Wednesday after the Irvine drug maker said it will have seven years of exclusive U.S. marketing rights for an experimental drug to treat a rare genetic blood ailment.

The stock, which had lost 75% of its value this year through Tuesday, climbed $1.65 to $2.40 on Nasdaq. Nearly 8 million shares changed hands, compared with average daily volume of about 84,500 shares over the last three months.

The Food and Drug Administration granted orphan-drug status to Nexell’s experimental medicine for chronic granulomatous disease, or CGD, an inherited blood disorder that leaves patients vulnerable to potentially fatal infections.

An estimated 1,000 to 1,200 individuals in the U.S. have the disease. Those with CGD “typically die by their mid-30s,” said William Albright, Nexell’s president and chief executive.

Nexell said it is sponsoring final-stage human trials of the drug at the National Institutes of Health.

U.S. law grants seven years of exclusive sales for so-called orphan drugs--medicines intended to treat conditions that affect fewer than 200,000 patients. The law is intended to give companies an incentive to create drugs for these illnesses. Treatment for orphan diseases can cost more than $100,000 a year per patient.

In the late-stage tests, some patients will be given Nexell’s treatment, a stem-cell product made from blood cells of a related donor. Others will get the current standard therapy for chronic granulomatous disease: antibiotics and interferon gamma, a copy of a protein used to stimulate the immune system. Nexell intends to finish enrolling patients in this trial in 2003.

The announcement provided some upbeat news at a company that announced in June it would be firing two-thirds of its 100 employees by the end of the year as part of a restructuring.

Nexell, which has lost more than $150 million over the last five years, is transferring rights to its cell-processing products to its biggest shareholder, Baxter International Inc. in an effort to cut distribution, marketing and sales costs.

Nexell hopes to focus on developing cancer vaccines, the treatment for the inherited blood disorder and such diseases as multiple sclerosis.

FDA approval of Nexell’s CGD product would prove useful in marketing other related drugs, Albright said.

Bloomberg News and Reuters were used in compiling this report.