Poniard shares fall after cancer drug shows lower survival

Jan 25 (Reuters) - Shares of Poniard Pharmaceuticals Inc PARD.O fell as much as 21 percent on Monday as its cancer drug picoplatin showed lower overall survival rate in a mid-stage trial, although the drug met its main goal.

The mid-stage trial tested picoplatin as a neuropathy-sparing alternative to oxaliplatin for the first-line treatment of metastatic colorectal cancer in 101 patients who had not received prior chemotherapy.

Oxaliplatin is marketed by Sanofi-Aventis (SASY.PA) as Eloxatin.

The study met its main goal as picoplatin in combination with 5-fluorouracil and leucovorin -- a common chemotherapy regimen -- showed statistically significant reduction in neurotoxicity compared to oxaliplatin given in combination with the same regimen, the company said on Sunday.

However, patients on picoplatin showed overall survival of 13.6 months, as compared to an overall survival of 15.6 months for those on the oxaliplatin regimen.

Patients on picoplatin also had more frequent and severe thrombocytopenia, or low platelet count, and neutropenia, or a low number of a type of white blood cells, the company said in a statement.

The complications were rare, with only 1 patient or about 2 percent, having febrile neutropenia and 2 patients, or about 4 percent, having minor bleeding issues.

"While it is a small study and data are clearly not conclusive, we believe it does increase the risk of a non-inferiority late-stage trial," Leerink Swann analyst Howard Liang said in a note to clients.

"Continued development of picoplatin is dependent on successfully finding a partner as Poniard only has cash through mid-2010 and appears unlikely to be able to obtain financing to fund what could be expensive late-stage development," Liang added.

As of Sept. 30, the company had cash and investment securities of $40.1 million. In November, the company said it expects the existing cash and investment securities to fund operations at least into the first quarter of 2010.

Analyst Liang downgraded the stock to "market perform" from "outperform," citing its "recent rally" and the "discouraging" data.

Shares of the company, which have risen more than 40 percent over the past one month before Monday's loss, fell as much as 21 percent to $2.05 in morning trade on Nasdaq.

Leerink's Liang said he sees an outright acquisition or a partnership on very favorable terms as near-term upsides for the stock, but added that the company's possible inability to survive as a drug developer in the absence of a partner can offset the near-term upside. (Reporting by Esha Dey in Bangalore; Editing by Aradhana Aravindan)