Keryx: Few Options After Failed Trial

Keryx's (KERX) Phase III trial for the colorectal cancer drug perifosine failed to reach its goal of improving overall survival of its drug relative to a placebo.

Specifically, Phase III, titled X-PECT, pitted perifosine plus capecitabine, a chemotherapeutic that inhibits DNA synthesis, against a placebo plus capecitabine in nearly 468 adults at 65 testing sites. The company only issued top-line results that did not include the specific results of the study. As I note below, after listening to its conference call, the drug's developer, AEterna (AEZS), looks like it will likely not pursue further efforts with perifosine, at least in the short-run. Perifosine is in-licensed to Keryx for the U.S., Canada, and Mexico from AEterna and last year the drug showed positive results in mice for the treatment of Hodgkin lymphoma. Specifically, the drug did what AEterna and Keryx claimed it might do, which was increase apoptosis (programming cell death) and thereby increase host organism survival rates.

AEterna held a conference call on April 2 with the top-line results for the failed perifosine study. In the call, AEterna's Dr. Juergen Engel (CEO) said that despite the disappointing results, the company has $46 million that it would use to pursue its other anti-cancer drugs and specifically AEZS 108 for ovarian and prostate cancer. Importantly, Engel also stated that AEterna would consult with its partners (which implies Keryx) to decide what to do next.

Keryx is in a slightly different position as perifosine's licensee. Ron Bentsur, Keryx' CEO stated that X-PECT "was a well-run study, despite the outcome" in Keryx' top-line data announcement. Thus, the company is unlikely to challenge the study directly. Bentsur took steps away from perifosine, stating that "we plan to focus … on Zerenex (ferric citrate) long-term Phase III study for end stage renal disease." Thus, with its $31 million in cash, the company appears to be moving on to its renal drug. However, Keryx will not conduct the Phase III study for Zerenex until late 2012, and even then, the drug will need a New Drug Application (NDA) grant from the FDA. It is not a certainty that the drug will receive an NDA, because the FDA needs to see complete safety and efficacy information from the Zerenex Phase III study. Thus, from here significant hurdles (and risks) remain.

All is not lost for perifosine and Keryx, however. Perifosine showed promise when it was used in conjunction with Velcade, a proteasome inhibitor, to treat multiple myeloma (plasma cell cancer). The phase 3 clinical trial for perifosine plus Velcade (Bortezomib) is still recruiting. Efficacy results could be different for multiple myeloma when compared to advanced colorectal cancer, which was the target of the X-PECT study. We will need to see the detailed results of the phase 3 study, and we will also need to learn what Keryx intends to do once it re-evaluates whether it will pursue further studies with perifosine, especially for multiple myeloma.

While perifosine did not reach its primary goal of increased survival rates for advanced colorectal cancer, its secondary endpoints, specifically, overall response rate and progression-free survival for those patients for which the cancer was eradicated, could show promise. Keryx took a very aggressive approach with the drug by pursuing treatment for advanced colorectal cancer. Colon cancer is a disease that progresses over time and in later stages is more difficult to treat effectively. Colorectal cancer originates from epithelial cells lining the colon with mutations in genes that monitor cell division and program them to destruct. Multiple myeloma originates from damage to the genes that control white blood cell (B lymphocyte) production. Results for perifosine's treatment of multiple myeloma could be different from the poor results for perifosine's treatment of advanced colorectal cancer. Only further study could prove or disprove efficacy.

As I've noted in past articles, biotechs like Keryx represent a binary option for investors where a drug works or it does not, and the former results in potentially significant rewards and the latter could mean the biotech needs more cash to try again. The company is unlikely to give up or declare bankruptcy, but with $31 million in cash its next prudent move is to raise additional capital to pursue perifosine further or table it for the time being to focus on other projects, or pursue both routes. However, the potential for rich rewards from perifosine are no longer available in 2012 due to the results of the latest study.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.