Panacos' Plans

Yesterday, Rule Breakers pick Panacos Pharmaceuticals (Nasdaq: PANC  ) released its second-quarter financial results and updated investors on the progress of its HIV drug candidates.

In June, Panacos released positive phase 2 results from one patient group taking its lead drug, bevirimat. More study results from the next higher dose of the drug are expected by the end of the third quarter, with results from another cohort coming in the fourth quarter.

To help quench doubts about bevirimat's efficacy in treating HIV, on the conference call Panacos showed that the HIV viral load reductions seen in patients taking bevirimat have been similar to those of other already approved compounds like Gilead Sciences' (Nasdaq: GILD  ) Viread or Trimeris' (Nasdaq: TRMS  ) Fuzeon.

The plan for bevirimat is to continue escalating doses of the drug in the phase 2 study as long as safety is maintained in patients taking the compound and an approximate one log mean viral load reduction can be achieved.

Not all is good with Panacos, though. After completing a phase 1 study of its second-generation maturation inhibitor, the company decided to discontinue development of the drug and bring forward a new second-generation compound because of poor bioavailability of the first drug.

Panacos also opened the door for phase 3 studies of bevirimat to take longer to begin than the previous guidance of year-end 2008, which itself represents a one-year delay from the previous expectations for the start of phase 3 testing.  

Developing a more convenient oral tablet or capsule version of bevirimat is still in the works. Testing of a solid formulation of the drug in healthy patients should occur by the end of the year. It is still hoped that a solid version, rather than the liquid formulation that is currently being used, will be available for phase 3 studies, whenever they begin.

There are still a lot of unresolved questions with Panacos' lead development program. At least investors will have more bevirimat efficacy and safety data to to tide them over until the drug's formulation issues can be worked out.

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Fool contributor Brian Lawler owns shares of Panacos but no other company mentioned in this article. The Fool has a disclosure policy.