Genmab tanks on disappointing cancer data

Shares of Denmark's Genmab slid 27 percent as investors reacted to the news that its lead cancer drug delivered disappointing data in a late-stage trial for non-Hodgkin's lymphoma. Arzerra gained the backing of an FDA panel for chronic lymphocytic leukemia back in May and is widely expected to win marketing approval for that indication. But the disappointing clinical trial data released today will cost Genmab a big payment from GlaxoSmithKline. Missing that milestone prompted Genmab to trim its revenue outlook for the year by $142 million.

GlaxoSmithKline agreed to a whopping $2.1 billion partnership deal for Arzerra nearly three years ago. And the pharma giant is big enough to weather today's setback without experiencing any market turbulence. But it wasn't easy sailing for Genmab, as analysts fretted over the impact a trial failure could have on doctors' opinion of the drug. In the NHL trial, the top dose delivered only a 10 percent response rate among patients who had not responded to Rituxan.

"We believe Genmab and partner GSK will almost certainly not be able to pursue regulatory filing with these data, requiring a larger Phase III study in NHL patients for approval; potentially a long-term head-to-head trial against Rituxan," said the analysts at Jefferies.

- read the Reuters story
- read the report from the Wall Street Journal