Mallinckrodt, Palatin plan market return of radiotracer

January 9, 2006

In the next few weeks, the FDA is expected to hold an advisory panel to review whether and under what circumstances the radiotracer NeutroSpec will return to the U.S. market.

In the next few weeks, the FDA is expected to hold an advisory panel to review whether and under what circumstances the radiotracer NeutroSpec will return to the U.S. market.

The technetium-based agent was pulled from the market Dec. 19 by its developer Palatin Technologies and distributor Tyco Healthcare Mallinckrodt at the request of the FDA after reports of severe adverse reactions among patients. The worst reactions, two of which led to patient deaths, were associated with off-label uses of the product.

In a meeting Dec. 15 between FDA officials and corporate representatives, the regulatory agency requested a recall of NeutroSpec from customer inventories as well as an end to marketing, sales, and distribution of the agent until further review was completed (SCAN Alert, Dec. 19).

The addition of safeguards will be among the issues discussed, according to Palatin executives, who plan to present evidence supporting the tracer's continued use in the diagnosis of equivocal appendicitis. The advisory panel will also discuss the possible use of the drug for currently off-label applications, such as the diagnosis of osteomyelitis.

"We do not believe this is at all widespread," said Carl Spana, Ph.D., company cofounder, CEO, and president. "I think there is a good possibility of us coming out of the advisory panel in a very strong position and being able to reintroduce the product to the marketplace."

Spana plans to present data underscoring a favorable risk:benefit ratio for equivocal appendicitis, noting that severe adverse effects occurred exclusively during off-label applications.

"The FAEs (fatal adverse effects) we are seeing have been confined to patients who have very severe cardiopulmonary compromise," Spana said.

NeutroSpec links technetium to a monoclonal antibody that selectively binds to white blood cells. This causes the radioisotope to accumulate at infection sites. Clinical tests of NeutroSpec provided evidence of its effectiveness in the diagnosis of equivocal appendicitis, leading to a July 2004 decision by the FDA to approve the product for this indication.

News of Palatin's FDA woes caused the company's stock to tumble Dec. 19 nearly 20%, or 60¢, from $3.45, rebound briefly, then drop again below $3 before recovering some ground to settle around $3.30 at the start of the new year. The share price was above $4 during the RSNA meeting, before the company announced Dec. 2 that it was receiving reports of life-threatening or fatal reactions associated with NeutroSpec administration. Mallinckrodt and Palatin had issued a warning letter to healthcare providers two days before the announcement that two deaths had been attributed to cardiopulmonary failure within 30 minutes of NeutroSpec injection.

Regardless of what happens regarding NeutroSpec, Palatin will continue developing its experimental drug for erectile dysfunction, which had been the source of most of the attention directed at Palatin prior to its regulatory problems. Currently in advanced phase II tests, PT-141 is being groomed as a competitor for Viagra and other treatments for ED. Unlike these treatments, however, PT-141 appears to also boost sexual desire. This has led the company to begin studying the effect on premenopausal women diagnosed with sexual arousal dysfunction.

Revenues from NeutroSpec have grown steadily since its introduction in September 2004. Mallinckrodt had garnered $9.8 million in sales over the product's first 12 months on the market. Palatin earned $2.5 million in royalties and another $2.5 million in transfer sales.

But it was interest in PT-141 that sparked much of the interest among investors in Palatin. Publicity from consumer media in November about this experimental drug was linked to the sudden surge in Palatin's share price. The negative publicity regarding NeutroSpec put a damper on this enthusiasm, but it may have been only temporary.

Palatin's share price has rebounded since news of NeutroSpec's withdrawal from the market. Positive news from the upcoming FDA advisory panel could help drive the share price up further.