Drug Development

UPDATED: Hopes fading, OncoGenex acknowledges a PhIII flop for cancer drug

Any dwindling hopes that investors still had in OncoGenex $OGXI largely evaporated Tuesday morning when the Seattle-based biotech reported that its late-stage effort for custirsen failed a Phase III study for castration resistant prostate cancer.

The Phase III failure is spurring OncoGenex to see if it can get a green light from the FDA to get an early look at a separate study for non-small cell lung cancer as it assesses its remaining prospects.

OncoGenex had already fallen into penny stock territory after a series of setbacks, its market cap shrinking to a mere $26 million ahead of today’s report. That’s less than the $39.7 million in cash it reported at the end of Q2. And now OncoGenex has contracted MTS Health Partners to start exploring its “strategic alternatives,” which can be loosely translated as a grim review of what comes next for the faltering biotech.

The company’s stock plunged 34% after the news hit, dropping to 59 cents a share.

It’s all been down hill for OncoGenex since Teva pulled out of its collaboration a little more than a year ago. A Phase II study for apatorsen failed last fall. Its stock cratered at the end of last year after the biotech took an early look at one subgroup population in a Phase III study of custirsen and determined there had been no improvement in the overall survival rate. The company followed up by slashing close to a third of its staff.

OncoGenex has had a long, hard fall since the optimistic days of 2009, when it turned up at ASCO with promising results from a small study of custirsen and saw its shares trade around the $30 mark.

OncoGenex CEO Scott Cormack

OncoGenex CEO Scott Cormack

Now, with its stock battered and its back against the wall, OncoGenex wants another peek at its remaining Phase III study. Investors will not have much confidence that the company’s fortunes will turn around at this point.

“Given that the ENSPIRIT trial has nearly completed enrollment and we believe there are likely a sufficient number of events to determine the effect of custirsen in NSCLC, we are eager to expedite the final data analysis, which would allow us to conserve resources and fully understand the value of the asset as we evaluate our alternatives to maximize shareholder value,” said OncoGenex CEO Scott Cormack.

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