Microcap Tokai tumbles on discontinued pivotal trial

Cancer

Tokai Pharmaceuticals ($TKAI) had hoped that its prostate cancer candidate could best Medivation’s ($MDVN) Xtandi (enzalutamide) in a Phase III trial, offering an improvement in radiographic progression-free survival (rPFS). But now the microcap biotech has discontinued that pivotal trial due to disappointing data.

The company was following the recommendations of its data monitoring committee (DMC) based on a review of all the safety and efficacy data for its galeterone in treatment-naïve metastatic castration-resistant prostate cancer (mCRPC) patients whose prostate tumors express AR-V7. Based on its review, the DMC determined that the trial was not likely to succeed in meeting the primary endpoint, improvement in rPFS for Tokai’s galeterone versus Medivation’s enzalutamide.

Tokai shares tumbled by about 70% on the news to a market cap of about $35 million. The Boston, MA-based company plans to move forward with galeterone but is awaiting more detailed data to determine how.

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“We are very disappointed by this outcome,” said Tokai President and CEO Jodie Morrison in a statement. “An immediate priority is to analyze the unblinded study data in detail as we evaluate potential paths forward for galeterone and our pipeline.”

In addition to the now discontinued ARMOR3-SV trial, Tokai also has the ongoing ARMOR2 expansion in mCRPC patients with acquired resistance to enzalutamide, and a  planned study in patients who rapidly progress on either enzalutamide or abiraterone acetate. It will evaluate these studies as well.

At June 30, Tokai had $43.9 million in cash with a net loss of $11.4 million in the first quarter. The company is slated to report earnings on August 10 and will, no doubt, offer further details then.

Tokai shares had popped initially on a $97 million IPO in September 2014 from a $15 offer price to almost $25. Since then, they have declined consistently--down to about $1.50 on the latest news.

- here is the release

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