Advancis’ resolution: New name, new product

Friday, Dec. 29, 2006

Advancis Pharmaceutical Corp. of Germantown expects to start the new year with a new name and finish it with a new product ready to market.

The company has filed an application with the U.S. Food and Drug Administration for approval of its once-daily antibiotic treatment for strep throat in adults and adolescents.

In August, results from the company’s final clinical trial of Amoxicillin pulsys for adults and adolescents met FDA treatment guidelines.

The FDA is to decide on the application by mid-February. The company is confident of getting final approval for marketing the drug by mid-October, said Robert Bannon, vice president for investor relations.

The company’s search for a new name, now down to five finalists, said Bannon, also may be announced in February. Advancis hired ‘‘a couple of branding companies” to help find a name that ‘‘will not step on anybody’s toes,” he said.

Federal district Judge Sue L. Robinson in September ruled that the company’s name, which it chose in 2001, threatened the marketing value of the French company Sanofi-Aventis, formerly Aventis Pharmaceuticals, which sued Advancis.

For the quarter ended Sept. 30, Advancis reported a net loss of $9.9 million, compared with a net loss of $5.9 million a year ago. It also reported increased sales of its Keflex antibiotic product to $2.4 million for the quarter. To distribute Keflex 750, the company recently set up a sales and distribution system in 75 geographic areas in the United States.

‘‘We are not yet set up for sales and distribution of Amoxicillin pulsys through the sites we set up for the new-strength Keflex,” Bannon said. The company will expand the sales fleet on its own or partner with a larger pharmaceutical firm.

‘‘It would be beneficial for us to [partner] because those companies have a large sales force in place and can add our products to the list they present,” Bannon said.

The once-a-day strep pill uses Advancis’ patented ‘‘pulsed” technology. Current treatments for strep throat, such as conventional amoxicillin, require doses up to four times a day.

Advancis estimates the total market value for all amoxicillin strep throat drugs at $450 billion annually. Bannon said half of that is for adults.

‘‘But remember, there are other treatments for strep,” Bannon said. ‘‘In that way there is opportunity for Amoxicillin pulsys.”

At least one analyst is upbeat about the company's progress.

‘‘Because of the company’s clinical trial problems a year ago, it is under the radar of some [investors] now,” said Brain McCarthy, senior biotechnology analyst for Merriman, Curhan, Ford Corp., an investment bank.

He said his firm started coverage of Advancis on Dec. 20 because of proof-of-concept of its phase three trial with the pulsys technology and “pretty convincing results.“

“But one of the most attractive aspects is that the product offers daily doses, which will be attractive for non-compliance patient populations,” McCarthy said. That includes elderly and pediatric patients if the product is eventually approved for children.

Katherine Xu, an analyst with Pacific Growth Equities in San Francisco, upgraded Advancis shares from ‘‘neutral” to ‘‘buy” following the positive test results in August. She called the technology a ‘‘good concept.”

The drug application filed last week followed a year of anxiety for company executives. In the fall of 2005, Amoxicillin pulsys failed to meet FDA guidelines for treating adults and children in separate phase 3 clinical trials. Its executives huddled and considered options including discontinuing the company, Bannon said. Instead they restructured the dosages and timing of the treatment for a new phase 3, or final, trial for adults. The company has delayed tests of the drug for strep in children younger than 12 until next year.

Earlier this month, Advancis entered into purchase agreements for the private placement of 6 million shares of common stock, raising $18 million in gross proceeds.