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Rumors Still Plague Chiron's Sepsis Drug

An analyst's note of caution adds to the worry nibbling at the biopharma's shares.


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can't seem to shake Wall Street fears that its experimental sepsis drug is faltering.

Credit Suisse First Boston biotech analyst Meirav Chovav issued a cautious research note Monday on the drug, dubbed TFPI, after Chiron made a presentation at her firm's health care conference.

"In the presentation, management appeared reserved about the results of the Phase III trials of TFPI in severe sepsis. Management spoke about the need to analyze the data in the study, rather than emphasizing a more optimistic outlook," Chovav wrote. She rates Chiron a buy, and her firm has a banking relationship with the company.

Shares of Chiron were off $1.66, or 3.2%, to $49.85 in recent trading, after falling as low as $49.61.

Chovav's research note will only intensify

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Wall Street chatter about the problems with TFPI. The drug is very important to Chiron because it's one of the few products in the company's near-term development pipeline.

Chiron spokesman Martin Forrest said the company is still analyzing results from the TFPI clinical trial, and that the goal remains to have something to announce by the end of the year.

"We've been cautiously optimistic

about TFPI from the beginning of the clinical program, and we're maintaining that caution in the program right to where we are today -- in the final stages of wrapping up the clinical trial," he says.

Martin also says that, contrary to some of the rumors, top Chiron executives have not yet seen any of the TFPI test results.

But Chovav believes Chiron has spent the past two weeks analyzing the data, which suggest that TFPI may not have met its primary clinical goal of achieving a statistically significant improvement in the mortality rate of patients after 28 days.

"We believe that a statistically significant positive result on the 28-day mortality endpoint should have resulted in an announcement already," writes Chovav, adding that negative or mixed TFPI news could push Chiron shares down 10% to 20%.