Novelos shares hammered after Ph3 fiasco

Novelos (NVLT) announced this morning that its pivotal Phase III trial for its lead product--NOV-002--failed to hit the primary endpoint. Investors bailed quickly on the news, with the developer's shares dropping 81 percent, hitting a 52-week low of 30 cents a share.

Novelos had recruited 903 patients with advanced non-small cell lung cancer in 12 countries to evaluate NOV-002 in combination with first-line paclitaxel and carboplatin chemotherapy versus paclitaxel and carboplatin alone. The primary efficacy endpoint of the trial was improvement in overall survival. The developer says it plans to release detailed data later.

The drug is already available in Russia, where it has been in use for 10 years. And investors had been keyed up for the big news on Novelos' pivotal trial.

"We are very disappointed that our pivotal Phase III lung cancer trial did not meet the primary survival endpoint," says Harry Palmin, president and CEO of Newton, MA-based Novelos. "We were hopeful of a positive outcome based on our statistical model simulations and stated assumptions. In retrospect, it appears our simulations were inaccurate due to trial data deviating from our statistical model, the impact of censoring patterns, and control arm survival exceeding our expectations based on historical precedents... Meanwhile, we are scheduled to present new NOV-002 preclinical data at the AACR Annual Meeting in April 2010, and we are on track for results from a NOV-002 Phase II breast cancer trial in 3Q 2010. We are also on track to initiate a Phase II hepatitis C trial shortly, with our second compound NOV-205."

- check out the Novelos press release