Feb. 8 (Bloomberg) -- ChemGenex Pharmaceuticals Ltd.’s experimental leukemia treatment had a “low” response rate in a study submitted as part of the Australian company’s efforts to sell its first drug, U.S. regulators said.

Food and Drug Administration staff, in a report posted today on the agency’s Web site, questioned the clinical significance of the medicine’s benefits. The drug, Omapro, is designed to target the chronic myeloid type of leukemia in patients with a genetic mutation that makes them resist existing treatments. An FDA advisory panel will review the staff findings and make recommendations on approval Feb. 10.

Omapro works differently from to Novartis AG’s Gleevec and Tasigna and Bristol-Myers Squibb Co.’s Sprycel, and would be the first treatment for patients with the so-called T315I mutation that causes resistance to those drugs. Sales of treatments for drug-resistant chronic myeloid leukemia may reach $380 million by 2020, said Shane Storey, an analyst with Wilson HTM Investment Group in Brisbane.

“If this product is approved, then there is a new option for at-home administration of something that’s going to give patients a durable response,” Storey said by phone before the FDA report was posted. “It’s preferable to the aggressive chemotherapy options that CML patients have once they’ve developed T315I and face accelerated disease.”

Studies have shown that about half of all patients with chronic myeloid leukemia develop resistance to Gleevec over five years and 15 percent of those are caused by the T315I gene mutation.

Shares Jump

Storey has a “buy” rating on ChemGenex, based in Geelong, near Melbourne, and expects the stock to climb to A$1.97 within 12 months. The shares closed at 84.5 Australian cents today and have more than doubled since reaching a five-year low of 31 Australian cents on Feb. 25 last year.

Chronic myeloid leukemia is a slow-progressing condition in which a genetic flaw triggers a person’s bone marrow to produce too many white blood cells. The cells are malignant and don’t perform their normal infection-fighting role.

In the study reviewed by FDA staff, data were submitted from only 66 of the 100 patients who planned to enroll, and 15 percent of patients responded to chronic treatment. The average benefit was 7.7 months. ChemGenex didn’t submit information on how it tested for the T315I mutation, and 35 percent of patients weren’t confirmed to have the gene at the time they started the study, part of the entry criteria, the staff said in the report.

About 4,830 people were diagnosed with chronic myeloid leukemia in the U.S. last year, with a median age of 67, according to the National Cancer Institute. Kareem Abdul-Jabbar, the National Basketball Association’s all-time leading scorer, said in November he had the disease.

Gleevec, sold as Glivec outside the U.S., is the standard treatment. It’s Novartis’s second-biggest product, with $3.94 billion in sales last year. The Basel, Switzerland-based drugmaker has said it plans to ask regulators to expand use of its back-up medicine Tasigna after a study last year showed it was better than Gleevec at treating newly diagnosed chronic myeloid leukemia.

Gene Mutation

ChemGenex has said it plans to submit a supplementary application for patients who fail existing treatments for any reason, once Omapro is approved for people with the T315I mutation.

The company, which has never made a profit, said in December it licensed marketing rights for Omapro in Europe, the Middle East and Africa to Lake Forest, Illinois-based Hospira Inc. for 11.1 million euros ($15 million) and as much as 74.1 million euros in performance payments. ChemGenex plans to market the drug in the U.S. itself.

Omapro is derived from the yew tree known as Cephalotaxus harringtonia. Its medicinal properties were probed in a U.S. National Cancer Institute screening program in the 1970s funded after former President Richard Nixon declared war on cancer. The same project uncovered Bristol-Myers’s breast cancer drug, Taxol, derived from Pacific yew trees.

To contact the reporters on this story: Catherine Larkin in Washington at clarkin4@bloomberg.net; Simeon Bennett in Singapore at sbennett9@bloomberg.net

Last Updated: February 8, 2010 10:28 EST