The Worst Biotech Failures of the Week

See which companies suffered the worst clinical setbacks in the week ending April 4.

Apr 8, 2014 at 9:30AM

Things were tough all over last week as the biotechnology industry continued its month-long slide. It was also a rough week in the clinic as an unusual number of companies announced disappointing clinical results and trial stoppages. Amgen (NASDAQ:AMGN) narrowly missed the mark with its otherwise successful oncolytic cancer virus. GlaxoSmithKline (NYSE:GSK) finally gave up on a late-stage lung cancer study. A temporary trial halt left Halozyme (NASDAQ:HALO) shares badly bruised. The worst clinical failure of the week belongs to Prana Biotechnology's (NASDAQ:PRAN) mid-stage Alzheimer's flop.

PRAN Chart

PRAN data by YCharts

So close
The first big loser comes as a bit of a shock. Two weeks ago, Amgen's talimogene laherparepvec, or T-vec, program was on the list of winners. The modified virus specifically infects tumor cells and replicates itself until they burst. Top-line data from an advanced melanoma trial showed impressive response rates. Two-thirds of tumors injected with the virus shrank by 50% or more. The virus even spread to other tumors and reduced their size.

Last week, Amgen announced the failure of T-vec to produce statistically significant overall survival data. It missed by an incredibly narrow margin. T-vec reached a p-value of 0.051. This means that even though T-vec patients survived longer, there's a 5.1% chance it's just coincidence. If the chance of coincidence been been less than 5%, the trial would be considered a success.

Amgen isn't going to let this setback stop what has been an otherwise successful program, however. The primary endpoint of this late-stage trial was durable response rate, a goal that T-vec clearly accomplished. The result does reduce T-vec's chances of approval as a monotherapy, at least for advanced melanoma.

T-vec still has very good chances of becoming an integral part of a successful combination therapy. It has a date with Merck's star immunotherapy candidate, MK-3475. The trial should begin this fall. Keep your eyes open for the results.

Finally giving up
GlaxoSmithKline has had a string of successes over the past several years, but MAGE-A3 is not one of them. The cancer vaccine failed to extend disease-free survival in separate melanoma and lung cancer trials. Despite the failures, Glaxo refused to quit the lung cancer trial in hopes of finding a subset of patients that responded well. Glaxo spent a couple weeks looking for that subset before finally giving up.

Glaxo emerged from the announcement relatively unscathed. The majority of investor disappointment fell on its partner, Agenus (NASDAQ:AGEN). Glaxo added Agenus' QS-21 Stimulon to boost the immune response to the cancer vaccine. Agenus finished the week down 13%. It's shares have fallen 34% since Glaxo first announced the failure on March 20.

Agenus has heat shock protein vaccines in mid-stage development, and a portfolio of preclinical stage immune oncology candidates, but few resources to develop them.  It's QS-21 Stimulon deal with Glaxo was one of its limited revenue streams, but hardly enough to bring it to positive cash flows. By the end of last year, Agenus had just $3 million in remaining potential payments from Glaxo. If the MAGE-A3 vaccine reaches commercial stages, Agenus is only entitled low single-digit royalties for a period of 7-10 years.

Temporary halt
An independent data monitoring committee recommended Halozyme halt enrollment and dosing of pancreatic cancer patients with its PEGPH20. The committee noticed a possible difference in the rate of thromboembolism, or blood clots and vessel blockages.

PEGPH20 is a longer-lasting version of Halozyme's successful rHuPH20, which is an approved subcutaneous injection that facilitates local absorption of other drugs. PEGPH20 goes beyond the injection site to reach solid tumors, leaving them more susceptible to cancer therapies.

PEGPH20 works by dismantling the hyaluronan component of tumors' protective infrastructure. Thromboembolism is the type of side effect you might expect from a drug that breaks down the extracellular matrix surrounding cancer cells. In theory, an immune response to the damaged tissue could form clots that eventually break loose and obstruct blood vessels.

The halt dragged the company's stock down nearly 30% following the announcement. Shares of Halozyme have fallen more than 50% since reaching record highs in January.

The biggest disappointment
Last Monday, Prana Biotechnology reported some very disappointing results from a phase 2 Alzheimer's Disease trial. Its lead compound PBT2 failed to significantly reduce levels of beta-amyloid plaques in the brains of mild Alzheimer's disease patients.

Patients in the PBT2 arm showed a reduction in the plaque presence, but so did the placebo group. With just 15 patients on Placebo and 27 on PBT2, the failure could be explained by rotten luck. There was also a lack of improvement in brain metabolic activity, cognition, and function. As a 12-month trial, these results could be explained by a lack of sufficient time, the small number of patients measured, or -- probably the likeliest explanation -- that the drug just failed. The market assumed the results simply indicate failure and pummeled the stock into a 76% loss for the week.

6 stock picks poised for incredible growth
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Cory Renauer has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers