Telik cancer drug fails trials; stock plummets

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telik incTelik Inc. said on Tuesday that its experimental cancer drug failed to improve survival in patients with advanced lung cancer or in patients with ovarian cancer, sending its stock plunging nearly 70 percent.

The biotechnology company said a late-stage, or Phase III, trial of its most advanced drug, Telcyta, did not significantly improve survival in patients with advanced lung cancer who had failed other treatments, which was the main goal of the trial.

The Palo Alto, California-based company said a Phase III trial of patients with resistant ovarian cancer also failed the trial's main goal of demonstrating significant improvement in survival.

"These results are extremely disappointing," Dr. Michael Wick, Telik's chief executive officer, said in a statement.

A third trial, designed to demonstrate significant tumor shrinkage in patients with resistant ovarian cancer, may not be suitable to submit to regulators because of discrepancies between the clinical review of the tumor scans and the independent radiology review, the company said.

About 25 percent of the patients were discontinued from the trial early.

It was not just the results, though, that troubled some analysts. It was the way they were released.

"We believe management's timing of data disclosure raises serious red flags," Eric Ende, a Merrill Lynch analyst, said in a report. "It is unusual for companies to withhold phase 3 data for extended periods, especially negative data as was presented today."

Telik was not immediately available for comment, though Wick said in a statement that the company was conducting additional, detailed analyses of the data from the trials.

"We plan to discuss those results with our advisers to determine the next development steps," Wick said.

The lung cancer trial, known as ASSIST-2, tested 520 patients, of whom a portion received Telcyta and a portion received a drug called gefitinib.

The 440-patient ovarian cancer trial, known as ASSIST-1, tested patients who had failed several previous treatments, some of whom received Telcyta and some of whom received the agents liposomal doxorubicin or topotecan.

The third trial measuring the drug's impact on tumors was called ASSIST-3.

"We believe Telik was hoping that positive data from the ASSIST-3 would offset negative data from the ASSIST-1 & 2 trials, but that hope backfired as all three trials failed," Ende said.

The company's shares fell $11.38 to $4.88 in afternoon trading on Nasdaq.

source - Reuters