June 24, 2009 / 10:47 AM / 10 years ago

UPDATE 2-FDA OKs amended prostate cancer drug trial - OncoGenex

* FDA, OncoGenex agree to modify late-stage trial

* Agreement modifies study population

* Shares rise as much as 18 pct (Adds analysts comments, updates share movement)

By Anand Basu

BANGALORE, June 24 (Reuters) - OncoGenex Pharmaceuticals Inc OGXI.O said it reached an agreement with U.S. health regulators, through the special protocol assessment (SPA) process, to amend the design of a late-stage trial of its lead prostate cancer drug.

OncoGenex, which went public last August through a reverse merger with Sonus Pharmaceuticals Inc, had said in May that it was seeking a partner to develop the drug, OGX-011.

“I would be comfortable saying that partnership interest would intensify materially on recent regulatory development,” Versant Partners analyst Douglas Loe said by phone.

Loe said the FDA’s active participation in crafting the study design through the SPA and positive results from earlier mid-stage trial have eliminated risk factors.

Loe rates the stock at “buy” with a $28.50 price target.

The U.S. Food and Drug Administration agreed on modifications to the study population of a previously reviewed late-stage trial, featuring survival as the main goal, the biotech company said.

The study will now evaluate patients receiving first-line chemotherapy, rather than those receiving second-line chemotherapy, the company said.

Rodman & Renshaw, which reiterated the stock at “Market Outperform,” said the stock is significantly undervalued, especially in light of the valuations of companies in similar stages of development in the prostate cancer space.

Rival Cougar Biotechnology CGRB.O, which also has a similar drug in late-stage trials, is being acquired by Johnson & Johnson (JNJ.N) for about $970 million.

OncoGenex shares were up 17 percent at $22.80 in afternoon trade Wednesday on Nasdaq. They touched a high of $23 in morning trade.

For related alerts double-click [ID:nWNBB0585] . (Editing by Aradhana Aravindan and Gopakumar Warrier)

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