Oncothyreon slumps on new cancer drug data

Oncothyreon skids after new lung cancer drug data fails to improve survival rate

Associated Press

NEW YORK (AP) -- Shares of Oncothyreon Inc. fell Thursday after the drug developer announced new clinical trial data about an experimental lung cancer treatment that failed to improve overall survival rate.

THE SPARK: Oncothyreon said that it identified some patients who appeared to live longer after treatment with Stimuvax. In a group of 806 patients who received a combination of chemotherapy and radiation at the same time, patients who took L-BLP25 lived for 30.8 months on average. That compares with 20.6 months for patients who were given a placebo.

About two-thirds of the patients in the trial were treated that way. The rest received chemotherapy and then radiation. The patients had inoperable, locally advanced non-small cell lung cancer.

THE BIG PICTURE: The Seattle company again said that L-BLP25 did not meet its main goal in the study. in December Oncothyreon said patients who were treated with chemotherapy, radiation, and the drug had median survival of 25.6 months and placebo patients had survival of 22.3 months.

L-BLP25 is designed to work by stimulating the body's immune system so that it can identify and destroy cancer cells. It is the most advanced drug in Oncothyreon's pipeline of products under development, according to the company's website. It has no products on the market. Oncothyreon licensed the experimental drug to a division of the German company Merck KGaA, which conducted the study.

Side effects of L-BLP25 included injection site reactions, breathlessness, fatigue, back pain, nausea, chest pain, headache, decreased appetite and joint pain.

THE ANALYSIS: Cowen & Co. analyst Simos Simeonidis said the latest trial results represent an "unexpected comeback" for L-BLP25 because the results are impressive and they come from a large group of patients. He said Merck KGaA has not announced a decision on the drug but he said he would be surprised it if ended its partnership with Oncothyreon.

Simeonidis rates Oncothyreon shares a "Buy."

SHARE ACTION: Shares of Oncothyreon dropped 53 cents, or 20.3 percent, to $2.08 in midday trading. The stock fell 51 percent on Dec. 19 after Oncothyreon reported the earlier study data. The stock had gained 19 percent since then.

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