When the government of New Zealand approved the controversial drug Isoprinosine for use by AIDS patients late last year, the drug's maker was jubilant.
After all, Newport Pharmaceuticals International Inc. had been promoting Isoprinosine as a potential AIDS treatment and saw the December action by New Zealand as a boost in its drive to market the drug in the United States, where it was developed but has never been cleared for use.
But two months later, the Food and Drug Administration notified the small, Newport Beach-based company that it had rejected its application for domestic use of the drug as therapy for AIDS-related complex, which often precedes the onset of the deadly acquired immune deficiency syndrome.
It was the third time that the agency had formally ruled against Newport Pharmaceuticals' applications for licensing Isoprinosine in the United States and once again brought cries of unfair from supporters of the company--who point to the drug's broad use in foreign nations such as New Zealand as an endorsement that the FDA refuses to heed.
But to some investors who bought into the company on the strength of its overseas acceptance and hopes that Isoprinosine would gain FDA approval, the issue has become one of whether Newport officials, including its founder and former chairman, Alvin Glasky, knowingly exaggerated their claims of the drug's effectiveness in order to profit from stock sales.
On Thursday, three unhappy shareholders filed suit against Newport in Orange County Superior Court, claiming that while Glasky and other insiders were selling stock at "artificially inflated" prices, investors were being set up for a fall.
In particular, the shareholders argue that Newport repeatedly glossed over the difficulty of winning FDA approval, while continually promoting the drug's wide use abroad.
While Isoprinosine is used in about 80 countries overseas, its acceptance in Europe, Canada and Latin America seems far from a ringing endorsement.
A recent Times survey of medical officials in more than a dozen foreign nations where Isoprinosine is used reveals that health officials in most of those countries say they have little or no evidence that the drug is effective against any of the viral diseases for which it is being prescribed.
Providing evidence of the drug's effectiveness apparently has been Newport's problem. At the root of all three formal FDA rejections of the drug has been the company's inability to document to agency standards the claims for Isoprinosine's effectiveness. Moreover, in addition to formal denials of bids for domestic licensing, the FDA has on several occasions been forced to refuse even to permit testing of Isoprinosine on a number of viral diseases.
Officials in New Zealand said they approved Isoprinosine as an AIDS treatment largely for humanitarian reasons.
The data Newport submitted to support its licensing application did not show convincing evidence that it really works, said Dr. Bob Boyd, deputy director of clinical services for the New Zealand Department of Health. Rather, he said that the data showed only that Isoprinosine is not toxic.
Still, there are isolated reports from overseas--largely from researchers for distributors of the drug--that Isoprinosine showed some promise in treatment of viral diseases such as oral and genital herpes.
Additionally, Michael Davis, head of the Canadian Department of Health and Welfare's infection and immunology section, said a review of data that Newport submitted to the Canadian government on Isoprinosine's usefulness in the treatment of a rare brain disease, subacute sclerosing panencephalitis (SSPE), led him to believe the drug does slow the progression of that usually fatal illness, a rare form of encephalitis.
In most cases, however, the foreign health officials said doctors in their countries are allowed to prescribe Isoprinosine not because there always is a lot of evidence that it works but because there are no indications that it is unsafe.
It is used to treat a laundry list of ailments including melanoma, hepatitis, herpes simplex, juvenile diabetes, the common cold, influenza, measles, mumps, chicken pox, varying forms of encephalitis, and, in New Zealand, that country's handful of AIDS patients.
Some in the medical community refer to Isoprinosine as the drug in search of a disease.
Still, overseas sales of the drug to fight this legion of diseases accounted for most of Newport's $10 million in revenues in fiscal 1986. Newport makes Isoprinosine--its only proprietary product--at plants in Costa Rica, Switzerland and Ireland.
The company's biggest markets are France and Italy, which together account for about two-thirds of all Isoprinosine sales.
In Italy the law requires scientific documentation and analysis of a medicine before it can be approved by the Ministry of Health's Department of Pharmaceutical Registration.