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Transkaryotic Shares Plunge

October 03, 2002|DENISE GELLENE | TIMES STAFF WRITER

Transkaryotic Therapies Inc. disclosed Wednesday that the Food and Drug Administration was sharply critical of its data on an experimental treatment for Fabry's disease, stunning investors who thought Replagal was on track for approval.

The Cambridge, Mass., company also slashed its third-quarter earnings projections, citing slower sales of Replagal in Europe. The news drove the company's shares down about 45% to $18.40 on Nasdaq amid questions about the firm's previous disclosures.

Chief Executive Richard Selden, in a conference call with analysts, would not say when the company learned that the FDA had problems with its data, particularly on pain. Analysts said the data were in briefing documents that Transkaryotic received about a month ago from the FDA in preparation for an advisory panel meeting. The advisory meeting had been set for last week but was canceled.

"I feel we have been forthcoming in our statements about the FDA and am quite comfortable with how we have conducted ourselves," Selden said. However, he did not respond directly when an analyst asked if Transkaryotic had been contacted by the Securities and Exchange Commission.

Transkaryotic told analysts that the FDA said its pain data were "uninterpretable" and "did not support approval." The firm had expected that the drug would be approved on the basis of its pain relief data.

Selden said the firm was in talks with the FDA about using other findings from clinical trials to support drug approval. He said he believed that Replagal would be approved, possibly by early next year.

But analysts said that it now appeared that Transkaryotic's rival Genzyme Corp. was ahead in the race to market a drug for Fabry's disease, a rare disorder that affects no more than 2,000 Americans. The winner stands to receive from the FDA an exclusive license to market its drug for seven years.

The drugs are genetically engineered copies of an enzyme lacking in Fabry's patients. Without it, fatty substances build up in the kidneys, and that can lead to organ failure.

"We thought TKT had the lead for getting approval for Replagal, and now it looks like that has totally evaporated," said William Tanner, an analyst with Leerink Swann & Co. in Boston. " ... We were sort of led to believe that things maybe were OK."

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