EpiCept shares hammered after FDA rejects app, demands new trial

Shares of EpiCept (EPCT) cratered this morning after the developer announced that the FDA had handed back its NDA on a new therapy for AML, saying that it needed to mount a new pivotal trial in order to make its case for Ceplene.

Approved in Europe two years ago, the therapy is co-administered with IL-2. But the company reported that regulators concluded that "the application did not establish Ceplene's therapeutic contribution in its combination with IL-2, and recommended that an additional confirmatory pivotal trial assessing Ceplene's contribution and using overall survival as a primary endpoint be conducted." Investors quickly bailed on the company after the news hit this morning, sending its share price down 43 percent.

"We are surprised and obviously very disappointed by the FDA's decision on our application," said CEO Jack Talley. "The Ceplene/IL-2 regimen, which is being rolled out to patients in the European Union, is the only approved treatment that has been shown to prevent relapse of AML patients, of whom the majority will die within a year should a relapse occur. We believe that the results of the Ceplene Phase III AML study, which demonstrated a statistically significant improvement in leukemia free survival without impacting patients' quality of life and no treatment related mortality, together with the supporting data we generated for the application deserved a detailed review." Talley said that he planned to meet with the FDA as soon as possible.

EpiCept acquired the AML therapy back in 2005 when it bought out Maxim Pharmaceuticals for $136 million in stock.

- here's the EpiCept release