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IMREG’s $3 MIL. FINANCING CONTINGENT ON FDA APPROVAL OF "CERTAIN TESTS"

Executive Summary

IMREG's $3 MIL. FINANCING CONTINGENT ON FDA APPROVAL OF "CERTAIN TESTS" of the firm's Imreg-1 AIDS drug, according to a recent Imreg filing with the Securities and Exchange Commission. In the filing, Imreg discloses that a group of 45 investors has placed $3 mil. in escrow, with the actual investment of the funds contingent on several factors. The terms include "approval of the Food and Drug Administration for [Imreg] to conduct certain tests of its product, and [the company] obtaining $2.5 mil. in additional financing." Closing is scheduled to occur by June 30, with an option to extend to June 30, 1993. Imreg officials met with FDA representatives on Feb. 28 to discuss prospects for Imreg-1, specifically, FDA permission to re- initiate clinical trials. Clinical development of the AIDS therapy has been stalled since 1988, when FDA raised questions about randomization in the drug study and about the company's criteria for classifying those patients who had progressed to AIDS in clinical studies. FDA's analysis of the 151-patient trial found that three of 93 patients receiving Imreg-1 had progressed to AIDS compared to four of 48 placebo patients, not a statistically significant difference ("The Pink Sheet" April 10, 1989, T&G-1). FDA's Vaccines & Related Biologics Advisory Committee, which reviewed studies of Imreg-1 at meetings in November 1988 and April 1989, concluded that additional data from controlled clinical trials would be needed to corroborate the drug's biologic effect in delaying progression of AIDS-related complex patients to AIDS. On April 28, 1989, FDA denied the company's October 1988 request to distribute Imreg-1 under a Treatment IND. At the Feb. 28 meeting, FDA advised Imreg Chairman Arthur Gottlieb, MD, to submit a clinical trial protocol for Imreg-1, according to meeting minutes prepared by FDA. If the agency clears the protocol, FDA Center for Biologics Evaluation and Research's Janet Woodcock, MD, said she would be willing to write a letter stating that the clinical trial may proceed. In addition to Woodcock, who heads CBER's biological INDs division, FDA Deputy Commissioner for Operations Jane Henney, MD, FDA Ombudsman Amanda Pedersen and FDA General Counsel Ann Wion also were present at the meeting, according to the minutes. In addition to submitting a protocol, the company must perform potency assays on new batches of Imreg-1, the FDA officials told the New Orleans-based immunomodulator drug firm. Once the protocol is accepted by FDA, Henney said that a letter would be drafted explaining that Imreg-1 would be cleared for clinical trials "with the stated understanding that [FDA] needs the potency data before the product is put into an efficacy trial." According to the minutes, CBER's Woodcock "noted that FDA needs statistical validation to determine the number of patients to be tested batch by batch." Henney proposed that FDA draft the letter in response to Gottlieb's concerns that "the negative perception (e.g. that Imreg[-1] will never be approved by FDA) is making things very difficult for the firm," the minutes note. Woodcock offered to write the letter, which she said would "include FDA's and Imreg's concerns, and have the correct tone."
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