For ALS Patients, a Drug With a Clouded Future

By Robert O'Harrow Jr.
Washington Post Staff Writer
Monday, July 10, 2000; Page A01

Kyle Hahn can no longer speak clearly, his body ravaged by ALS, the fatal neurological disease named for baseball legend Lou Gehrig. But there was no mistaking his horror late last year when he learned that his shipments of an experimental medication called Myotrophin were being cut off.

His girlfriend, Terry Frank, said his face froze into a "silent scream" that reminded her of the agonized stare in an Edvard Munch painting. Hahn, of Trenton, Ohio, was one of 160 patients using Myotrophin on an experimental basis, undeterred by a debate among scientists and regulators about whether the drug really worked against amyotrophic lateral sclerosis, or ALS. Already robbed of his ability to walk and play guitar, the musician really didn't care what skeptics thought about Myotrophin. He was convinced it was keeping him alive.

Then came a decision by Cephalon Inc. of West Chester, Pa., to stop the free shipments and cut off Myotrophin production. "It felt like I was cast into a void . . . beyond anything I have yet faced in living with this nightmare known as Lou Gehrig's Disease," Hahn said in an e-mail written with a computer device that responds to movements of his eyeglasses.

Now, as Hahn's supplies dwindle, a federal grand jury is examining Cephalon and the story behind the drug the company once promoted on Wall Street as a breakthrough against ALS.

The grand jury investigation is the latest installment in a years-long drama that has repeatedly raised, then dashed the expectations of investors, the medical world and, most importantly, ALS patients. At issue is whether Cephalon cut scientific corners or misrepresented test results to try to speed Myotrophin's race to market.
Since Cephalon began seeking federal Food and Drug Administration approval in 1995, it has been dogged by questions about its testing, stock sales and promotional tactics. Anonymous tipsters complained to the FDA about a "wide range" of possible improprieties at its Beltsville manufacturing plant. Stockholders accused company officials of hyping Myotrophin test results to boost stock prices and enrich themselves.

Cephalon officials say the company has done nothing wrong and is cooperating with the investigation. The decision to stop distributing Myotrophin was not related to the inquiry, they say. The company could not afford to invest more in a product that faced an uncertain future.

Patients like Hahn don't know who to believe. They only want a drug--any drug--that might make their lives more bearable.
"The patients are desperate. They'll grasp at any straw," said Abbey Meyers, president of the National Association for Rare Disorders, an advocacy group that administered a patient lottery for Myotrophin. "Who is going to tell the patients the scientific truth, unbiased by these financial influences? You don't know who to trust."

Promises and Profits
Biopharmaceutical companies were booming in 1987 when Frank Baldino, a former Dupont Co. executive, formed Cephalon to try to "alter the course of neurodegenerative diseases," he said recently.
Myotrophin was Cephalon's first major effort. Numerous competitors were developing drugs to battle ALS, a degenerative neurological disease that afflicts 30,000 Americans and 70,000 worldwide. Incurable and usually fatal within five years, ALS gradually robs a patient of the ability to walk, talk and breathe.

Cephalon hoped to develop a drug capable of stemming the degeneration of motor neurons. Though not an ALS cure, such a drug might prolong a patient's life and functioning.

By 1993, working in partnership with Chiron Corp. of Emeryville, Calif., Cephalon believed its medication, Myotrophin, was ready for human testing. It launched two clinical trials--one in the United States and one in Europe. Chiron officials declined to be interviewed, citing the federal investigation.

The FDA, which must approve a drug before it can be marketed in the United States, had promised Cephalon and other companies that it would speed up its review of ALS medications because of desperate patient need.

Only one company was close to Cephalon in the race to develop an ALS drug--the French company Rhone-Poulenc Rorer Inc., maker of Rilutek, another drug then in clinical trials. Early results suggested that ALS patients taking the drug lived about three months longer than those on a placebo.

Wall Street investors were tracking the race. The medical world had long anticipated an ALS drug and market analysts believed it would be hugely profitable. Some, in fact, projected a worldwide market of $300 million, making Cephalon's stock a hot commodity.
Three years after Cephalon's clinical trials began, in June 1995, Baldino previewed the results for Wall Street analysts, then issued a press release.

Promoting studies of 266 North American patients, Baldino called the results "rather spectacular" and said they suggested that Myotrophin might increase patients' lives by six months.
The news triggered a trading frenzy. Cephalon's share price nearly doubled in a day, to more than $18 from $10.50. By year's end the share price had ballooned to more than $40 a share.
Among the first to sell at the escalated prices were Baldino and several others associated with Cephalon. Ten days after the announcement Baldino sold 75,613 shares, a portion of his holdings, at about $19 a share. The sale was allowed under Securities and Exchange Commission regulations. Baldino said he needed the money repay a company loan.

The SEC later slapped some Cephalon associates for using knowledge of the planned announcement to buy shares. In a federal civil lawsuit the SEC alleged that some Cephalon consultants--including a clinical investigator, a member of Cephalon's scientific advisory board, officers of a graphics arts firm and others--earned steep profits from questionable trades. The defendants have settled their cases over the past two years, forfeiting the profits and paying fines.
Meanwhile, ALS patients were ecstatic about Baldino's announcement. They traded information on the Internet and speculated that the drug would win quick FDA approval.
But concerns were mounting about the Myotrophin results and Baldino's portrayal of them.

The night before Baldino's announcement, a prominent neurologist with the Muscular Dystrophy Association, Leon Charash, questioned Baldino and other Cephalon executives about the methodology.
In a trial patients are not supposed to know if they are receiving the experimental drug or a placebo. But Charash, head of the MDA's medical advisory committee, said the Myotrophin injections produced a skin inflammation that might alert patients and bias the trial.

When Charash vented to reporters, questioning the trial's value, Charash said he "got a call from Mr. Baldino, who said I was costing him millions of dollars."
Baldino recently disputed Charash's account, saying the doctor felt slighted by Cephalon. He defended the trials as rigorously scientific.
Around the same time, two analysts at the Wall Street investment firm Salomon Smith Barney Inc., also questioned the results.
Toni Claudio, a former tenured professor at Yale University, and Reijer Lenstra, a physician and former drug industry researcher, warned investors in a report that the trial "will have difficulty passing a rigorous analysis by the FDA."
Meanwhile, FDA officials were waiting for results of a second clinical trial, in Europe, to see if testing on 183 ALS patients there corroborated the North American results.
Baldino unveiled the European results on Oct. 31, 1995. He called the tests an "important milestone" that confirmed the North American outcome. "What's going to come across is the remarkable consistency," he said at the time.

Baldino did not mention a troubling statistic from the European trial, known as Study 1202. There were more deaths among patients randomly given the ALS drug than among those given a placebo.
FDA officials homed in on the deaths after Cephalon approached the agency in late 1995 asking permission to make Myotrophin available to select patients, pending full FDA approval.
Myotrophin Trial: Study 1202
At the FDA, the evaluation of Cephalon's trials fell primarily to Paul Leber, then the director of the division of neuropharmacologic drug products and a known stickler for procedures.
Leber and FDA statisticians saw there were 18 deaths among patients given Myotrophin in the European trial and five among those on a placebo. Deaths are expected in a trial involving the terminally ill, and Cephalon argued that by chance, more seriously ill patients had ended up randomly assigned to the Myotrophin group.
But Leber wanted more information. Some within the FDA believed a third clinical trial was needed, but Cephalon, which already had spent $180 million in research, said it could not afford it.
FDA statistician David Hoberman said his analysis of the North American trial showed "barely statistically significant" evidence of patient improvement, according to FDA documents. The European trial, Hoberman said, failed to confirm even those limited effects.
Hoberman and Leber had little positive to say in June 1996 when the FDA's advisory panel on drugs for neurological disorders convened to consider Cephalon's request. The committee makes recommendations to the FDA board.
Leber reported that FDA experts examining the European study "were unable to reach the same conclusion as the firm."
Nevertheless, a number of neurologists vouched for Cephalon's research. Two of them had strong Cephalon ties.
Robert Miller, director of the MDA/ALS Research Center at California Pacific Medical Center in San Francisco where Myotrophin trials were conducted, said he believed the drug could slow the "progressive, relentless decline" in ALS patients.
In a recent interview, Miller said he was a paid Cephalon consultant, but that that did not influence his opinion.
Stanley H. Appel, who heads the neurology department at Baylor College of Medicine and is a giant of ALS research, also was a consultant, Cephalon stockholder and advisory board member when he testified. Appel said in an interview he saw no conflict.
"Dammit, I'm on the side of the drug, the patient and the company," he said.
Patients at the hearing practically begged to use the drug.
The panel approved Cephalon's request for limited distribution but said it wanted more research before urging FDA approval.
While Cephalon struggled, the rival drug Rilutek, in late 1995, became the first ALS medication approved by the FDA.
Cephalon regrouped. Officials asked the FDA panel to reconsider existing data. And company officials, along with patients' groups, began writing thousands of letters and leaning on congressional leaders for help.
A May 1997 letter to the FDA from Sen. Orrin G. Hatch (R-Utah) was typical. "It seems to me that there is an occasion here to provide patients with a drug they need at no risk to public health, and I hope the FDA will be able to seize that opportunity," he wrote.
Legal Complications
In May 1996, FDA investigators asked the agency's Baltimore office to check out anonymous tips alleging "that the firm engaged in a wide range of misconduct" in making and testing Myotrophin, according to an FDA report obtained through the Freedom of Information Act.
Among other things, the report said, the tipsters claimed the "firm's management directed employees to destroy raw data for batches of drug product that did not meet specifications." They alleged that Cephalon kept two sets of laboratory notebooks, one with false data to show the FDA. The tipsters claimed that Cephalon "has recently destroyed the notebooks containing the actual data," the memo said.
The company denied it did anything of the sort. Later in 1996, some Cephalon investors filed suit, accusing officials of making "false, selective and misleading" disclosures about Myotrophin's tests to drive up stock prices.
"Defendant described the results of their studies as 'spectacular' . . . They also asserted that Myotrophin extended the lives of patients with ALS . . .," the investors said in court filings. "All of these misrepresentations were false and misleading."
Cephalon again denied the allegations.
In June 1999 the company settled the case for $17 million. Baldino said the company settled because the lawsuit was "very time consuming and very costly."
Putting to rest the FDA's inquiry was not so easy. FDA investigators referred the matter to the Justice Department's Office of Consumer Litigation, which opened the grand jury probe.
FDA and Justice officials recently gathered documents from lawyers who handled the stockholders' class action lawsuit.
Officials at the FDA and the Justice Department declined to comment. In November, Cephalon acknowledged in an SEC filing that current and former employees had received subpoenas.
"The Company believes that the investigation relates to the release during the period 1994-96 of some lots of Myotrophin used in clinical trials and related reports filed with the U.S. Food and Drug Administration," the filing said.
A Pilgrimage of Hope
Despite these problems, ALS patients clung to their hopes that Myotrophin would win FDA approval. Rilutek helped with some symptoms, but it was hoped that together, the two drugs would have even a bigger impact. On May 8, 1997, Hahn and several dozen other ALS patients and supporters traveled to Bethesda for another FDA advisory committee hearing.
They arrived in wheelchairs and with canes, linked to devices to help them speak and breathe.
"They tell me this disease will kill me within five years, but I don't believe that has to happen and with your approval of Myotrophin, it will give many of us a fighting chance to prove it," Hahn said in a statement read by Frank.
Some FDA committee members became emotional, but their disappointment with Cephalon soon became obvious.
Some members were offended that Cephalon called on dying patients to speak on Myotrophin's behalf. Justin A. Zivin, a professor of neurosciences at the University of California at San Diego, said recently, "This is not how science was done. . . . What I really want is for the victims and their families to understand they were being used . . . What it amounted to was a lobbying effort to pressure us."
Sid Gilman, the panel's chairman and head of the University of Michigan Medical Center's neurology department, said Cephalon's data was "very flimsy at best. They had not carried forward a scientific question appropriately."
Baldino said his company acted in good faith.
"We have put over $180 million to work in ALS," Baldino said at the meeting. ". . . It's extremely difficult to justify further investment, and it's almost impossible for us to idly throw $20 million or $30 million at another study to try something new."
The committee voted to reject Myotrophin, saying its effectiveness was still unproven. The next day, investors signaled their concern as stock fell to $13 from $20.
The Chosen Few
Hahn considered himself among the lucky when he was chosen to receive free supplies of Myotrophin under the limited FDA-approved lottery. Administered for Cephalon by the rare disorders organization, the lottery was supposed to be tightly controlled, since the drug had yet to win FDA approval.
Yet just weeks after Montgomery County Council member Betty Ann Krahnke announced in August 1998 she was battling ALS, she was visited by Cephalon consultant Thomas Garvey.
Garvey visited Krahnke and her husband, Wilson, at their Chevy Chase home and left behind an inch-thick binder of information about Myotrophin. And, according to Wilson Krahnke, Garvey offered to cut through the lottery red tape and arrange for Krahnke to get the drug.
Wilson Krahnke said he turned down Garvey's offer in September 1998. That an influential patient could pull strings to get Myotrophin while others waited disturbed the Krahnkes.
Cephalon officials said Garvey had no permission to make such an offer on their behalf. "He was probably a little overzealous, for sure," spokeswoman Sheryl Williams said.
Garvey said he did not recall suggesting that Krahnke could sidestep the lottery. "My agenda was to help her," Garvey said.
"I hope that old Wilson there didn't get the [wrong] idea," he said.
But Wilson Krahnke said, "We were left assured if we chose to do it, we could get the product."
"It was," he said, "a very hard sell."
No Winners
The ALS lottery patients who had come to rely on Myotrophin were not prepared for Cephalon's decision to cut off their supplies. The one-page letter sent to Hahn and others began, "Dear Participant . . . I regret to inform you . . . "
"I feel shafted," said lottery participant Leroy Hunter, 45, of Freeport, Ill. "There was hope there."
Like other patients, Hahn reduced his injections to once a day from twice daily to ration supplies. With every syringe injected into Hahn's withered leg, Frank says she thinks there is one less item in her friend's "repertoire of hope."
Cephalon officials lament that the company failed to meet patients' expectations.
"People have these strong beliefs that this drug improves their lives," Williams said recently. "Unfortunately, we were not able to prove that."
Baldino does not rule out renewing the fight for FDA approval, but he doesn't expect any movement soon. "The dream we had back in 1987 . . . is still an unrealized dream," he said.
Cephalon executives have moved on to more promising products. Recent Cephalon promotions have focused on Provigil, a drug to treat narcolepsy approved by the FDA in December 1998
The company's optimistic assessments, along with positive scientific reports by outsiders, of Provigil's prospects have helped send Cephalon stock on another upward surge.
The stock price spiked from about $35 at the beginning of the year to more than $72 in early March and now is approaching that peak--higher than the peak reached during the enthusiasm about Myotrophin.
On Friday, the stock closed at $70.43 3/4 a share.
A Drug and the Stock Market's Reaction
June 12, 1995: Cephalon announces results of North American study.
Stock rises 75 percent, from $10A the previous trading day to $18K.
Jan. 19, 1996: Cephalon reveals FDA qualms about European study results.
Stock drops 35 percent, from $35M to $23K.
May 8, 1997: FDA panel votes to recommend against approving Myotrophin.
Stock drops 35 percent the next day, from $20 to $13.
May 13, 1998: FDA says Myotrophin is "potentially approvable," but only with more study.
Stock drops almost 23 percent, from $14E to $11K.
After Myotrophin: Cephalon's stock has soared this year, partly because of positive reports about the potential uses of Provigil, a narcolepsy drug. The company also benefited from general investor optimism about biotechnology companies.

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