Another day, another implosion of a development-stage biopharma stock after disappointing clinical trial results. Yesterday's leader on the stock market decliner's board was drug developer Telik (Nasdaq: TELK ) after it announced that its lead cancer-fighting compound, Telcyta, failed three phase 3 clinical trials.
Telcyta has been in development as a treatment for various forms of cancer. Shares of Telik hit a high of nearly $30 a share back in April 2004, after the company reported preclinical results for Telcyta that showed the drug might inhibit cancer-cell growth. Then later in the year, Telik reported multiple phase 2 trial results of Telcyta as a treatment for ovarian and lung cancer. These results showed that patients taking the drug in combination with other cancer treatments had a 46% objective response rate for ovarian cancer and a 27% rate for lung cancer.
Based on these positive trial results, Telik enrolled Telcyta in five phase 3 trials for non-small-cell lung and ovarian cancer. Yesterday, results from the first three of these clinical trials came back, and none of them were positive. Telcyta failed to show a survival benefit in its lung-cancer trial, and the two ovarian-cancer trials had "inconsistencies" and "compromised" results because of supposedly bad data -- although Telik reported preliminary results that one trial failed its primary endpoint of improving survival.
I'm not sure what's worse: the confirmed failed clinical trial, or the fact that two of the trials had data that was too dirty to achieve final results, with one of the trials potentially having 25% of patients improperly cared for, according to Telik. Management estimated that it would take at least a couple of weeks to figure out the inconsistencies seen between these trial results and previous trials.
Shares of Telik were down more than 70% yesterday, and with one more phase 3 lung-cancer trial and another ovarian-cancer trial enrolling patients, it's tough to see how Telik is going to avoid whatever the problems and errors were that caused these trials to go bad. Unless it gets a better understanding of what went wrong in all these clinical trials, Telik might be a good company for investors to avoid.
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