TORONTO (Dow Jones)--Shares of YM BioSciences Inc. (YMI) have lost about half their value Wednesday morning, after the Canadian biotech announced the termination of a pivotal trial of its lead product, tesmilifene.
As reported after the markets closed Tuesday, a Phase III trial of the drug in patients with metastatic or recurrent breast cancer was brought to a halt after the independent Data Safety Monitoring Board said that, following an interim analysis, significant differences in overall survival between the treatment arms would be "very unlikely." No safety concerns were raised.
One group was being treated with tesmilifene and chemotherapy, and the other group was receiving just chemotherapy. It was the board's third interim analysis of the trial, which had enrolled a total of 723 patients.
"The trial is over," declared YM BioSciences Chairman and Chief Executive David Allan on a conference call. He stressed that, while the company plans to complete a thorough analysis of the data, it won't engage in analyses of subsets of patients, nor will it "mine the data."
In Toronto Wednesday, the stock has plunged C$2.46, or 55%, to C$2.00 on about 4 million shares.
Though it may investigate the drug's potential activity in other cancer indications, further testing in breast cancer won't happen, he said.
Investors had high hopes for tesmilifene, given that a previous Phase III trial showed a significant survival benefit. But management was at a loss to explain what happened[it’s not that hard: the drug doesn’t work, it never did work, and any data suggesting that it did was an artifact], and stressed that it had only received the "voluminous amount" of data less than 24 hours ago. The company hopes to be able to determine what went wrong when it has a chance to study the results in detail[LOL].
Allan said he expects the company's net cash position to be about C$80 million at the end of the second quarter, which ended Dec. 31. He added that YM BioSciences' core overhead costs, which don't include clinical activities, are about C$1.2 million a month. Second-quarter financials will be released in mid-February.
On the bright side, Allan said the company has long established a corporate strategy of diversification, as drug development is a risky business and it had to be prepared for the possibility of failure. He said the company has two other late-stage products in development - nimotuzumab, a treatment for head and neck cancer, and aeroLEF, an acute pain treatment designed to allow patients to individualize doses.
RBC Capital Markets analyst Philippa Flint slashed her target on YM BioSciences to C$2 from C$8.50, estimating its cash value at C$1.20 a share and its pipeline value at 75 Canadian cents a share.
While the company plans to consider its options with regards to tesmilifene, she believes halting development may be prudent unless there are "some clearer signs of potential in other tumor types," she wrote in a note. "We believe investors will now focus their attention on the remaining pipeline candidates, particularly nimotuzumab."
A Phase III trial of nimotuzumab in pediatric brain stem cancer is enrolling patients, and data could be available in the first half of 2008; a U.S. trial could begin later this year, she added.
With nimotuzumab data about a year away and concerns that aeroLEF won't show significant benefits over existing products, Flint isn't expecting the stock "to provide returns greater than the average of others in our research universe." She rates the stock sector perform.
Flint doesn't own YM BioSciences shares; her firm doesn't have an investment-banking relationship with the company. <<
PGS re MCU What doc would prescribe a vitamin supplement in place of an FDA approved drug to save the patient's insurer a few thousand bucks. Answer. None.
Lawyers would sell their children to see such an instance resulting in a fatal MI.
Ergo, MCU can sell the drug for as much as they want.
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