Curis Plunges on Failed Trial, Better News May Come by Year's End

Includes: CRIS, RHHBY
by: Chimera Research Group

Curis (NASDAQ:CRIS) released results Wednesday for its hedghog pathway inhibitor GDC-0449 in a pivotal Phase II colorectal trial run by Roche (OTCQX:RHHBY). The company said its drug failed to extend the time of disease progression or death in patients with metastatic colorectal cancer. Curis stock plunged from Tuesday's close of $3.26 to $1.69, a 48% drop.

This reaction is more akin to that of the failure of a drug. This is not the case. GDC-0449 has only failed a single indication in a complex multi-drug combo trial. This does not predict failure in the 18 other trials for this drug, where it has shown much promise in a broad range of indications including basal cell carcinoma, childhood medulloblastoma, and ovarian cancer. Cancer is not a single disease, it is very heterogeneous, where each indication may be driven by different or multiple mechanisms. One drug will not be effective for all indications.

It is true that Curis is now set back a year because the next set of pivotal data will not be due until 2011. However, by the end of this year, results will be available from a large Phase II for advanced ovarian cancer. Good results should give the stock some legs until the pivotal basal cell carcinoma data come out next year.

There is much literature evidence linking aberrant signaling in the hedgehog pathway to tumor growth. I fully believe GDC-0449 will be the first drug to prove in humans that inhibition of this signaling will reverse this event.

Disclosure: Long CRIS, RHHBY.PK