Advancis Pharmaceutical Corp. said last night that its lead product, a once-a-day version of the widely used antibiotic amoxicillin, has failed testing for a second time, this time in the final round of tests on children with strep throat.
The results could be devastating for the Germantown firm, which had staked its future on development of a technology that attacks bacteria in time-released staccato bursts.
But testing on children produced results similar to tests on adults and adolescents that Advancis reported last month. The drug was only 65.3 percent successful in curing the throat infection, far less than the 85 percent needed to qualify as a primary treatment. Standard penicillin worked better.
"I am clearly disappointed," said Edward M. Rudnic, the chief executive and co-founder of the firm. Though he indicated last month that negative results in pediatric testing might cause the firm to reconsider its entire strategy, Rudnic said he is not yet willing to give up on the technology.
After examining the adult test results, Rudnic said the firm thinks the drug could be successful if taken for 10 days, instead of the seven days for which it was used in the tests. He wants his researchers to see if similar conclusions can be made for treatment in children.
Advancis has about $40 million in cash and could afford more testing, but the company will have to take a critical look at whether it is worth the risk, Rudnic said.
"How comfortable are we and how confident are we that we can get a commercial product to market? That's what we need to ask ourselves over the next few weeks," Rudnic said. "If, on the other hand, we couldn't convince ourselves that we had a high degree of probability at being successful, then we would have to take a good hard look at our direction."
Advancis will need at least a few weeks to make a decision, he added.
The firm is likely to face tough questions from investors and analysts this morning in a conference call to discuss the results. Last month, a spokesman for Par Pharmaceutical Inc., which has invested $23.5 million in the amoxicillin product, said the company might pull out of a partnership with Advancis if both trials prove negative.
Investors have viewed the amoxicillin product as a potential huge revenue generator. More than 62 million prescriptions were written for amoxicillin in 2003, and annual sales of the antibiotic total $500 million a year. Advancis's product was particularly attractive because patients would ingest less of the antibiotic and have to take it only once a day, instead of three or four times a day.
For Rudnic, the technology has been, in many ways, a labor of love. Six years ago he quit a senior drug company job -- abandoning $3.5 million in stock options -- and sketched out the idea for the technology on a friend's dining room table. He raised millions of dollars to start Advancis, went public in 2003, and ultimately spent $50 million to research and develop the technology.
Advancis officials went through several rounds of human testing, growing increasingly more confident that they had a winner. But in mid-June, the firm learned that its amoxicillin product fared no better than penicillin. The results stunned many in the region's close-knit biotech community, in which Rudnic is a popular figure.
News that its lead product had proved disappointing was another in a string of setbacks.
Last October, Advancis announced that pharmaceutical giant GlaxoSmithKline PLC was ending a partnership to use the slow-release technology on another antibiotic, Augmentin. The market's response was swift: Advancis shares plunged 62 percent.
The company laid off 19 people -- 18 percent of its staff -- a month later, saying it would delay clinical trials on several other products using the technology. Advancis also said that it will have enough cash to operate through the first quarter of 2006.
The test results were released after financial markets closed. Advancis shares rose 5 cents yesterday in Nasdaq Stock Market trading to close at $1.75.