November 2, 2009 / 1:48 PM / 10 years ago

UPDATE 2-FDA denies approval for GTx drug;seeks additional study

* FDA asks company to conduct a second late-stage study

* FDA asks for safety and efficacy data

* Co might drop development of drug- analysts

* Shares down as much as 40 pct to all-time low (Adds conference call details, analyst comment; updates stock movement)

By Esha Dey

BANGALORE, Nov 2 (Reuters) - GTx Inc GTXI.O said U.S. health regulators did not approve its experimental drug to reduce fractures in men with prostate cancer, citing clinical deficiencies, and asked the company to conduct a second late-stage study.

The company’s shares were down 40 percent at $5.42 in morning trade. They touched a lifetime low of $5.37 earlier in the day.

Analysts expressed little surprise at the regulatory decision, saying the data from the late-stage trial of the drug were not good enough to convince the regulators, and added that the company might ultimately decide to drop development of the drug.

In a complete response letter to the company, the U.S. Food and Drug Administration asked GTx to provide data from a second late-stage trial showing the safety and efficacy of the drug, toremifene citrate, at 80 milligrams dosage.

“I think this is as close to a rejection as you can get,” Rodman & Renshaw’s senior biotechnology analyst Simos Simeonidis said.

“They have to start all over again. They have to do a whole new trial and that will take many years,” Simeonidis said, adding that he does not expect the drug to reach the market.

The drug’s safety concerns related to forming blood clots in the veins and potential cardiac arrhythmia signals — or irregularities in heart beats — outweighed its benefits, Simeonidis said.

The 80 mg dose of the drug is being developed to cut the risk of fractures in men with prostate cancer on androgen deprivation therapy (ADT).

ADT is the primary treatment for advanced prostate cancer, with about 100,000 men in the United States beginning ADT each year and about 700,000 being currently treated with ADT, the company said in its website.

The FDA also asked the company to show that the treatment does not have a detrimental effect on either time-to-disease progression or overall survival.

In a conference call with analysts, the company said it believes it already has enough information to show that the drug is not detrimental to overall survival.

However, the company added that it was surprised by the FDA’s decision to ask for a second trial since the FDA had already approved of the drug’s study plans under a special protocol assessment (SPA).

“The problem is that they moved the goalpost on this, because the SPA clearly says a single trial,” the company said in the conference call.

The special protocol assessment provides a company with a written agreement that the design and analysis of the trial are adequate to support a marketing application submission.

Analysts also said that the company would need to raise cash to support the additional trials requested by the FDA.

“They have technically enough money but they do not have enough money to do everything else they are doing,” Rodman’s Simeonidis said.

The company will have to go to the capital markets or look for partners, he added.

GTx currently has five more drugs in early to late-stage clinical trials, for indications including muscle loss in patients with a lung disease and the prevention of prostate cancer in high-risk men.

As of June 30, the company had cash, cash equivalents and short-term investments of $68.9 million.

GTx is requesting a meeting with the FDA to determine the next steps regarding the new drug application, the company said in a statement. (Reporting by Esha Dey in Bangalore; Editing by Vinu Pilakkott and Aradhana Aravindan)

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