Merck KGaA puts Stimuvax trial on hold after encephalitis strikes

A patient enrolled in the mid-stage trial of Merck KGaA's cancer vaccine Stimuvax contracted encephalitis, forcing researchers to suspend dosing for multiple myeloma as they evaluate the safety issue. The Phase II trial matches Stimuvax-a closely watched blockbuster candidate--with cyclophosphamide, a chemotherapy drug that is not used in other trials of the cancer vaccine.

Merck KGaA has mounted an aggressive slate of clinical trials for Stimuvax, which it partnered on with Oncothyreon (ONTY). The cancer vaccine is also in Phase III for lung and breast cancer. And it's one of several high-profile cancer vaccines which are being evaluated. Dendreon, Transgene and Antigenics are also pushing ahead with therapeutic vaccines of their own.

"An extremely negative surprise as Stimuvax is one of Merck's next hopes after Erbitux," Markus Mayer, an analyst at UniCredit Research in Munich, told Bloomberg. "Stimuvax was expected to become the next cancer blockbuster. Therefore, the bad news has certain weight for Merck's pharma growth expectations."

Trading in Oncothyreon shares was temporarily halted this morning on the news. But once it started trading investors wasted no time in expressing their displeasure, driving down shares more than 25 percent.

- here's the story from Reuters
- and here's the Bloomberg piece