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Shares of O.C. Drug Firm Dive

Pharmaceuticals: Price of NeoTherapeutics falls with lackluster tests of Alzheimer's medication.

April 30, 2002|From Bloomberg News

NeoTherapeutics Inc. shares fell 64% as the company said its most advanced experimental product, the Neotrofin medication for Alzheimer's disease, didn't work as expected in human testing.

The Irvine company's stock fell $1.40 to 80 cents on Nasdaq. Before Monday, the shares had fallen 40% this year.

Patients on Neotrofin didn't show a statistically significant benefit compared with those given a placebo treatment in a 12-week study. NeoTherapeutics said it is suspending Neotrofin research in Alzheimer's disease, which will reduce its monthly loss to less than $1.5 million from $2.3 mil- lion.

"We're in no cash crisis right now," said Alvin Glasky, the company's chief executive. "We're not concerned about the cash position of the company."

NeoTherapeutics ended 2001 with $7.2 million in cash and short-term investments. It raised $6.2 million in the first quarter through a sale of common shares.

Some jobs could be cut because of the halt in Neotrofin testing in Alzheimer's disease, though massive layoffs are not expected, Glasky said.

The company is awaiting results of other studies of the drug in Parkinson's disease, spinal-cord injury and chemotherapy-induced neuropathy.

Earlier studies suggested that Neotrofin could spur growth of nerve cells to replace ones destroyed in Alzheimer's disease. The National Institutes of Health had helped NeoTherapeutics with some early research needed to move Neotrofin into human testing, the company said.

The drug is based on the action of neurotrophins, molecules the body makes to promote growth of some brain nerve cells.

NeoTherapeutics said it also is preparing to move a cancer drug, Satraplatin, into the third and final stage of testing.

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