Just short of two years after Boston-based Tokai Pharmaceuticals $TKAI raised $97 million in an IPO, the small-cap biotech says its lead drug has imploded in Phase III. The news eviscerated the biotech’s shares, which dropped 70% in pre-market trading.
The data monitoring committee has concluded that galeterone won’t make much of a difference in the progression-free survival of patients with castration-resistant prostate cancer, and the biotech is slamming the brakes on the ARMOR3-SV study, effectively shredding Tokai’s business plan.
That doesn’t mean that Tokai is giving up. In a statement, the biotech says it will continue to look at the data on patients with acquired resistance to enzalutamide, and they plan to proceed with their study in patients who rapidly progress on either enzalutamide (Medivation’s Xtandi) or abiraterone acetate (J&J’s Zytiga). Xtandi and Zytiga are the two standard therapies used to treat prostate cancer.
Tokai sold the IPO on its case that their drug could benefit patients with prostate tumors expressing the AR-V7 splice variant. Now the company has $43 million left in the bank and some seriously skeptical investors to deal with. Typically in cases like this, a beleaguered biotech will reorganize in search of a new game plan.
“We are very disappointed by this outcome. An immediate priority is to analyze the unblinded study data in detail as we evaluate potential paths forward for galeterone and our pipeline,” said Tokai CEO Jodie Morrison.
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