Telcyta

[Welthy]

Bummer news from Telik -- I've been watching and hoping for better news on Telcyta. --- Welthy

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Telik's Shares Plunge as Cancer Drug Fails in Trials (Update7)

By Joi Preciphs and Catherine Larkin

Dec. 26 (Bloomberg) -- Telik Inc.'s shares fell 70 percent, the most ever, after the company said its lead drug candidate, Telcyta for cancer, failed three late-stage trials.

Telcyta didn't prolong survival in patients with advanced non-small cell lung cancer and platinum-resistant ovarian cancer, the Palo Alto, California-based company said in a statement today. The trials were conducted in the third of three stages of testing needed for U.S. regulatory approval.

Telik, which has never shown a profit, lost as much as $605.3 million of its market value after the price dropped, based on 52.4 million shares outstanding as of Oct. 31. Chief Executive Officer Michael Wick said the company will evaluate data from the studies, which involved more than 1,200 patients, to determine how to proceed with Telcyta's development.

``We see no residual value in Telik's technology beyond Telcyta,'' said Edward Nash, an analyst at Stifel Nicolaus in New York, who lowered Telik's shares to ``sell'' from `buy.'' Nash said in a note to investors today that he didn't expect the drug to show favorable results if more trials are done.

Shares of Telik fell $11.49 to $4.77 at 4 p.m. New York Time in Nasdaq Stock Market Composite Trading, after touching $4.69 earlier. The stock has lost 4.3 percent of its value this year before today.

The company reported a $20.5 million third-quarter net loss and has $82.5 million in cash as of Sept. 30, according to regulatory filings.

Options

Two weeks ago, some investors bet heavily the stock would soon suffer a steep decline. On Dec. 12, the price of the Jan. 2007 $5 put options more than tripled to 35 cents on heavier- than-normal trading of 4,017 contracts. It wasn't until today, when the shares dropped below $5, that those options had intrinsic value.

The options gained 83 percent to 55 cents today on trading of 18,998 contracts. Each put-option contract gives the right to sell 100 shares at a certain price before expiration; each call option gives the right to buy 100 shares at a set price within a time period.

``The data from all three of these trials were unblinded only in the last few days,'' said Carol DeGuzman, a spokeswoman for Telik, in telephone interview today.

``We issued the announcement as rapidly as we could once the results were available. The results were not available to anyone'' on Dec. 12, she said. DeGuzman refused to comment on ``options activity.''

Favorite of Speculators

Options data show that Telik is a favorite of speculators. The combined put and call open interest in its stock equals 70 percent of the company's outstanding shares. Only two companies in the 255-member Russell 2000 Health Care Index have a higher percentage: Northfield Laboratories Inc. and Artherogenics Inc.

In both of those stocks, the combined open options interest is greater than the number of shares outstanding.

Three investment funds own about 55 percent of Telik's shares. Eastbourne Capital Management LLC owned 12.8 million shares, or 25 percent, and OppenheimerFunds Inc. owned 10.1 million, or 19 percent, as of their September regulatory filings. Fidelity Investments owned 5.71 million shares, or an 11 percent stake, as of October.

Rick Barry, a portfolio manager at San Rafael, California- based Eastbourne, didn't immediately return a message. Jessica Greaney, a spokeswoman for New York-based Oppenheimer, said the fund managers responsible for Telik wouldn't be available to comment today. Deborah Pont, a spokeswoman for Boston-based Fidelity, said the company doesn't comment on specific stocks.

Survival

Telik's studies for lung cancer and advanced ovarian cancer, called ASSIST I and ASSIST II, did not achieve a ``statistically significant improvement'' in overall survival, the company said. The third study, ASSIST III, failed to meet its endpoint in demonstrating effectiveness in tumor response for ovarian cancer.

While all three trials showed some tumor response in each of the investigational arms that contained Telcyta, two of the trials, ASSIST II and ASSIST III, contained ``inconsistencies'' that need to be investigated, the company said.

``We are conducting additional, detailed analyses of the data from these three trials and plan to discuss those results with our advisers to determine the next development steps,'' said Telik's Wick, who was formerly a Harvard University cancer researcher, in the statement today.

To contact the reporters on this story: Joi Preciphs in Washington at jpreciphs1@bloomberg.net ; Catherine Larkin in Washington at clarkin4@bloomberg.net .

Last Updated: December 26, 2006 17:59 EST

[RandyW]

Kinda weird reading a financial statement to find pout a drug is not doing well or is doing well Huh?? Thank you for sharing this info qith us!

[Welthy]

Another story -- again Stock market related! Why there is no medical story, I haven't a clue. -- W

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Telik Falls Short By Brian Lawler

Wed Dec 27, 2:23 PM ET

Another day, another implosion of a development-stage biopharma stock after disappointing clinical trial results. Yesterday's leader on the stock market decliner's board was drug developer Telik (Nasdaq: TELK - News) after it announced that its lead cancer-fighting compound, Telcyta, failed three phase 3 clinical trials.

Telcyta has been in development as a treatment for various forms of cancer. Shares of Telik hit a high of nearly $30 a share back in April 2004, after the company reported preclinical results for Telcyta that showed the drug might inhibit cancer-cell growth. Then later in the year, Telik reported multiple phase 2 trial results of Telcyta as a treatment for ovarian and lung cancer. These results showed that patients taking the drug in combination with other cancer treatments had a 46% objective response rate for ovarian cancer and a 27% rate for lung cancer.

Based on these positive trial results, Telik enrolled Telcyta in five phase 3 trials for non-small-cell lung and ovarian cancer. Yesterday, results from the first three of these clinical trials came back, and none of them were positive. Telcyta failed to show a survival benefit in its lung-cancer trial, and the two ovarian-cancer trials had "inconsistencies" and "compromised" results because of supposedly bad data -- although Telik reported preliminary results that one trial failed its primary endpoint of improving survival.

I'm not sure what's worse: the confirmed failed clinical trial, or the fact that two of the trials had data that was too dirty to achieve final results, with one of the trials potentially having 25% of patients improperly cared for, according to Telik. Management estimated that it would take at least a couple of weeks to figure out the inconsistencies seen between these trial results and previous trials.

Shares of Telik were down more than 70% yesterday, and with one more phase 3 lung-cancer trial and another ovarian-cancer trial enrolling patients, it's tough to see how Telik is going to avoid whatever the problems and errors were that caused these trials to go bad. Unless it gets a better understanding of what went wrong in all these clinical trials, Telik might be a good company for investors to avoid.