Company News

UPDATE 3-GenVec says cancer drug not effective, ends trial

* Interim results show 8 pct survival improvement

* Shares fall 75 percent

(Adds analyst note, background, updates share price)

LOS ANGELES, March 29 (Reuters) - GenVec Inc GNVC.O has discontinued a pivotal trial of its experimental gene therapy drug in patients with pancreatic cancer because interim results showed it was unlikely to prove effective.

The disappointing news sent the company’s shares down 75 percent in after-hours trading.

GenVec said it has determined, after conferring with an independent oversight board, that the 330-patient trial would not meet its goal of demonstrating that the drug, called TNFerade, significantly improved survival for patients with advanced pancreatic cancer.

The data showed that TNFerade in combination with radiation and chemotherapy reduced the risk of death by about 8 percent compared to radiation and chemotherapy alone, according to GenVec.

An earlier interim analysis had shown that the drug reduced the risk of death by about 25 percent for patients in the pancreatic cancer trial.

Roth Capital Partners wrote in a research note last week that the most likely outcome of the latest interim look at the data would be for the trial to continue. Roth analyst Joseph Pantginis had put the odds of a cancellation due to futility -- the actual outcome -- at 5 percent.

The company said it would continue to follow patients who had been in the trial even though they would no longer receive the experimental drug. It also said it would conduct additional analyses of the data.

TNFerade is designed to deliver a gene called tumor necrosis factor alpha (TNF-alpha) to tumors using a stripped-down virus to carry the gene. The gene triggers production of TNF-alpha -- an immune system protein known to have anti-cancer properties.

Both safety and efficacy concerns have held back the field of gene therapy, which first emerged some 20 years ago. One experiment cured two French boys with a rare immune disorder, called severe combined immunodeficiency (SCID), but gave them leukemia in 2002. The field suffered a major setback when an Arizona teenager died in a 1999 gene therapy experiment.

GenVec said it would continue to focus on its funded vaccine programs and on supporting a collaboration with Novartis AG NOVN.VX to develop treatments for hearing loss.

Shares of GenVec, which closed at $2.81 on Nasdaq, were trading at 70 cents in after-hours trading. (Reporting by Deena Beasley; edited by Gunna Dickson and Lisa Shumaker)