By Pallavi Ail
(Reuters) - GTx Inc's experimental drug to treat muscle wasting in cancer patients became its second successive lead drug to fail late-stage trials, wiping out nearly two-thirds of the market value of the once-promising cancer-focused pharmaceutical company.
GTx said on Monday that the drug, enobosarm, failed to meet the twin goals of improving body mass and physical function in cancer patients — the latter measured by improvement in their ability to climb stairs.
There is no approved cure for cancer-induced muscle wasting, which results in decreased physical function, fatigue and weight loss.
There was an improvement in lean body mass in one of the two studies but overall the drug did not meet the pre-specified criteria, GTx said.
A 3-mg dose of the drug was tested on about 650 patients with non-small cell lung cancer — the most common form of lung cancer.
This is the second blow to the Memphis, Tennessee-based company, which in 2010 discontinued development of its then-lead product — a prostate cancer drug — after the U.S. Food and Drug Administration rejected its marketing application.
GTx was valued at over $800 million in 2007 when it was trading at around $23. After shares slumped 64 percent to $1.49 on Monday, the company's market value dropped below $100 million.
GTx said it now plans to meet the FDA to discuss the path forward for enobosarm — which was granted fast-track status in January. A fast-track designation expedites regulatory review of drugs that aim to treat serious diseases and fill unmet medical needs.
"Given the consistent, negative results from (the studies), we do not expect investors to ascribe any value to enobosarm," Cowen and Co analyst Eric Schmidt wrote in a note, adding that he does not expect the drug to be licensed without additional trials.
GTx Chief Executive Mitchell Steiner said the improvement in body mass seen in one of the studies, could potentially increase survival in patients with non-small cell lung cancer.
Cowen's Schmidt, however, countered that the FDA has been very clear that physical function is a requirement for approval, and that increases in lean body mass were not accompanied by improvements in physical function or survival in either study.
GTx's next most advanced drug is Capesaris, an experimental advanced prostate cancer drug currently in mid-stage studies.
"We are not optimistic for Capesaris's success, and believe GTx will require significant capital to continue its development," Schmidt said.
(Editing by Saumyadeb Chakrabarty and Joyjeet Das)