Subject: Carrington Labs May Have Overstated Case For Experimental AIDS and Cancer Drug 
Date: Published: 7/9/90 (116 lines)
Source:  Wall Street Journal.  Copyright Dow Jones & Co. Inc. 

    Heard on the Street:
    Carrington Labs May Have Overstated Case
    For Experimental AIDS and Cancer Drug
    ----
    By Roger Lowenstein
    Staff Reporter of The Wall Street Journal

    NEW YORK -- How can investors appraise the merits of a
 company whose future rides on developing an experimental and
 technologically sophisticated product?  
    Often, it's impossible to predict how the product will
 fare.  In such cases, investors should pay particular
 attention to the quality of the company's disclosures.
 Consider the case of tiny Carrington Laboratories.
    The Irving, Texas, company has $8 million in sales, $7
 million in net worth, and no earnings.  Yet its stock is
 valued at $125 million -- largely because Carrington is
 touting the potential of a drug it produces from an extract
 of aloe vera.
    On a radio broadcast in February, a Carrington official
 spoke of improvements by acquired-immune-deficiency-syndrome
 and cancer patients who had received either the drug or juice
 from the aloe plant itself.  Carrington also says its drug
 might be useful in treating scores of other ailments.
    And at a recent AIDS conference in San Francisco,
 Carrington said its drug "significantly improved the
 effectiveness of AZT in a six-month clinical trial of 47
 patients infected with the AIDS virus."  AZT, marketed by
 British-based Wellcome, is the only drug approved for
 treating AIDS.  
    Carrington, in a news release, went on to say that based
 on the results of the trial, conducted in Belgium,
 "researchers" have recommended a larger study and that
 Carrington "plans to market {its drug}, when approved, under
 the trade name Carrisyn."
    This is news to quicken one's pulse.  However, for some
 years, Carrington has been saying that the Belgian trial
 would test whether Carrisyn would, by itself, be effective in
 treating AIDS, and whether it would enhance AZT's
 performance.
    Nathan Clumeck, head of infectious diseases at St. Pierre
 University Hospital in Brussels, performed the trial.  He says
 the trial -- by no means conclusive -- didn't show any
 benefit from using Carrisyn alone, or that Carrisyn is an
 anti-viral agent.
    Carrington's news release didn't refer to results of
 testing Carrisyn on its own.  Also, of the 47 patients
 referred to in the release, the "significant" result is based
 on only 18 patients.  The others either dropped out during the
 trials or were participating in the trial of Carrisyn on its
 own.  (This was disclosed by Dr. Clumeck in a technical
 abstract in San Francisco.)  
    Carrington denies that its new release is incomplete.
 Clinton Howard, Carrington's president and largest
 stockholder, says, "It doesn't matter" how many people
 participate in the trial "as long as you achieve statistical
 significance."  But experts put great emphasis on the size of
 such trials.  Dr. Clumeck says, "This compound could act as an
 immunal stimulant in patients who receive AZT.  {But} this was
 a small number of patients.  It was a very preliminary study."
    Carrington says it didn't disclose the result of testing
 Carrisyn on its own because the test was "inconclusive."
 Nonetheless, William McAnalley, Carrington's chief of
 research, says, "Its more significant {AIDS} use will be in
 conjunction with AZT.  "
    If so, Carrisyn's uniqueness is far from clear.  Joyce
 Thomson, a spokeswoman for Wellcome in London, says that
 according to company scientists, "there are tens and tens of
 potential products, some of which are being tested with AZT
 and some of which have shown some promising results."
 Wellcome has contacted the makers of some of these other
 drugs, though not, as far as she knows, of Carrisyn.
    Carrington also didn't disclose that, after a 30-minute
 presentation by the company in May to the National Institute
 for Allergy and Infectious Diseases, the latter decided
 against recommending federal funds for clinical trials of
 Carrisyn.  Carrington says not all its results from the
 Belgian trial were available in May.
    "There is a real story here," Mr. Howard says.  "For five
 years a group of short-sellers have been saying that Carrisyn
 was just a hoax.  Now a world-class scientist has done a very
 well-controlled study showing it is effective."  Indeed,
 though it has yet to seek approval from the Food and Drug
 Administration, Mr. McAnalley says "There is no question in
 my mind we will get approval to sell it."  An FDA spokesman
 says, "That's their opinion."
    In general, officials of Carrington, which relies on
 periodic stock sales to fund operations, describe their drug
 more or less as a front-runner in the AIDS battle.  One says
 that, compared with other drugs, Carrisyn is "overwhelmingly
 significant."
    But the clear impression from scientists, drug industry
 executives and the alternative AIDS research community is
 that aloe vera -- long used for healing wounds -- is one of a
 large number of "maybes" in the AIDS battle.  John James,
 editor of Aids Treatment News in San Francisco, says "I've
 been aware of it for years.  I knew several people using it,
 but right now there is less interest in it."
    ---
    Carrington Laboratories
    (OTC; Symbol:  CARN)
    Business:  Pharmaceuticals
    Year ended Nov. 30, 1989:
    Sales:  $8.1 million
    Net loss:  $1.7 million; or 32 cents a share
    Average daily trading volume:  43,955 shares
    Common shares outstanding:  6.4 million

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