Weak Phase III sarcoma results see CytRx shares crater

In spite of its positive spin on what at best was a mixed bag of results, CytRx ($CYTR) could not stop the tanking of its shares last night after it posted new data from its key Phase III cancer trial of its last remaining product.

The tiny Californian biotech plummeted 63% in after-hours trading after it broke the news that its late-stage candidate aldoxorubicin underperformed in helping 433 patients with second-line soft tissue sarcoma (STS).

Things were already precarious as the FDA put a clinical hold on the trial in late 2014 after a patient using aldoxorubicin died, although this was lifted several months later. And the biotech is saying that this “interruption” has messed with its data, as it couldn’t show a follow-up on progression-free survival (PFS) for around half of the patients in its study as a result.

With the data it does have, the company said it missed its primary endpoint at month 24, as the study failed to show a significant difference between aldoxorubicin and investigator's choice of therapy (4.17 months versus 4.04 months).

CytRx is not giving up, however, as it will now have a second look at the figures, which it said would include longer patient follow-up and allow for “greater maturation of all endpoints.” The results of this are set to be posted by the end of the year.

But there was a bright spot as objective response rate (ORR) and disease control rate (ORR + stable disease of around four months) showed a near doubling in the aldoxorubicin arm compared to investigator's choice, including in patients who previously received treatment with doxorubicin, the biotech said in a statement.

The company is also continuing to look at the longer term data for overall survival (OS), a secondary endpoint of the trial. But all of this was not enough to encourage the market, which reacted badly to the news last night after the data were posted, pushing it down into penny stock territory. Analysts at Jefferies are also holding negative views, saying in a note to clients today that it sees "no path forward" for the drug, adding: "We do not think there is sufficient evidence to support the continued development of aldoxorubicin."

The company’s chairman and CEO Steven Kriegsman said the biotech has around $68.2 million in cash and is funded through the next Phase III STS trial analysis, and through a readout of its Phase IIb trial of aldoxorubicin in small cell lung cancer.

Aldoxorubicin is an adapted form of the chemotherapy agent doxorubicin, and the biotech has put all of its eggs into this one drug basket. It had originally hoped for a 2017 approval, but all now rests on its secondary analysis of the STS data.

A rare disease with many subtypes, STS occurs in about 12,000 cases annually in the U.S. and is a cancer that begins in the muscle, fat, fibrous tissue and other tissues. A decade ago there were few treatments for the disease, but more companies are now looking to get in on this market.

Votrient (pazopanib), originally developed by GlaxoSmithKline ($GSK) but now owned by Novartis ($NVS), is one of the main drugs targeted for STS, having been approved in 2012 by the FDA, and is one of the meds used in the CytRx trial.

There is also a newer treatment, approved by the FDA last fall, for Janssen’s ($JNJ) Yondelis (trabectedin)--a chemotherapy-type drug for advanced, STS liposarcoma and leiomyosarcoma.

And in early May, Eli Lilly ($LLY) also gained a priority review from the FDA to speed up its assessment of the U.S. Big Pharma’s STS candidate olaratumab.

- check out the release

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