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GTx’s (NASDAQ:GTXI) main shot at redemption for its lead pipeline candidate, toremifene (acapodene), failed to deliver with the release Tuesday night of phase III data that showed no significant reduction in the risk of developing prostate cancer in patients with a premalignant lesion.

Having already failed to convince the FDA of the drug’s effectiveness and safety in preventing bone fractures in men undergoing prostate cancer treatment (FDA words not sticks and stones hurt GTx’s bone drug, November 2, 2009), the results from this three-year, 1,600 patient study could have provided a major boost to toremifene’s prospects. Instead, GTx’s shares slumped 31% to a record low of $2.09 in early trade Wednesday, valuing the company at $76m, a major fall from grace having been worth $450m just six months ago.

Failed to make the grade

Toremifene is a selective estrogen receptor modulator (SERM), in the same class as Eli Lilly’s (NYSE:LLY) blockbuster osteoporosis drug Evista. The phase III trial tested a 20mg dose of the drug in preventing prostate cancer in men with high grade prostatic intraepithelial neoplasia (PIN), a premalignant lesion of the prostate.

Although toremifene reduced the relative risk of developing prostate cancer by 10.2% after three years, this was not statistically significant against placebo; the placebo rate was not disclosed.

The only positive note for toremifene was the safety profile data, with no significant difference in adverse events compared to placebo, particularly venous thromboembolic events which the FDA has previously been concerned about.

With the chances of toremifene being developed any further for high grade PIN now slim to zero, questions will now be asked about the validity of pursuing development of the 80mg dose for the prevention of bone fractures in prostate cancer patients receiving androgen deprivation therapies (ADT).

In response to the FDA’s rejection of toremifene in this setting last October, GTx intends to initiate the required additional phase III trial, Treat-2, by the end of the year.

The new trial will be funded through a recent restructuring of GTx’s partnership with Ipsen over toremifene, which will see Ipsen pay $58m upon starting the study; in return GTx has granted Ipsen more control over toremifene and agreed to waive its rights to milestones on European approval and a lower royalty rate overall.

Meanwhile, in Europe Ipsen is still awaiting a verdict from the regulator for toremifene in preventing bone fractures, although expectations remain low for approval (Event - European approval would start cash trickle for GTx, March 11, 2010).

Alternative pipeline options

Aside from toremifene, GTx’s other main pipeline assets are ostarine (GTx-024) and GTx-758. Ostarine, a selective androgen receptor modulator (SARM), has completed phase II trials for cancer cachexia, although its future is in doubt following the termination by Merck (NYSE:MRK) in March of its broad collaboration with GTx over SARM compounds.

GTx plans to discuss its late stage trial options with the FDA this summer, although it seems unlikely any trials will start without a new partner on board.

As for GTx-758, an oral luteinizing hormone (LH) inhibitor, a phase II study is underway, testing its ability to achieve medical castration without causing bone loss and other serious side effects of ADT in treating prostate cancer. Results from this trial are also expected this summer and positive data could provide a trigger for partnering discussions.

GTx ended March with around $39m in cash, yet with an estimated annual cash burn rate of around $33m, additional funding is likely to be required within the next 12 months. Investors are likely therefore to prefer that the extra cash is raised by signing a couple of licensing deals rather than being asked to stump up more money; the company has burnt $180m on R&D alone over the last five years, more than double GTx’s current market value.

The failure of toremifene to prevent prostate cancer in patients with high grade PIN is likely to cause much soul searching at GTx over the coming months; the now standard response in straitened times of hiring a financial advisor to “assess strategic options” could well be called for.

Source: GTx Has to Reevaluate Options Following Prostate Cancer Drug Failure