Keryx, Aeterna shares crater on word of Phase III cancer study flop

Canada's Aeterna Zentaris ($AEZS) put out the word this morning that perifosine flamed out in a late-stage cancer study conducted by its partner Keryx Biopharmaceuticals ($KERX). The treatment failed to hit the primary endpoint laid out for a group of patients with advanced colon cancer. And while the companies kept the lid on the data, the disaster triggered a seismic 60% drop in their share price this morning.

The study randomized patients into two groups: One group received perifosine with capecitabine while the control group received chemotherapy plus a placebo. The next step will be to see what, if any, kind of future development path lies ahead for perifosine. But Aeterna swiftly attempted to shift the spotlight to two other late-stage cancer drugs.

"We are currently conducting further data analyses in collaboration with our licensee partners, in order to determine the future development strategy for perifosine," says Aeterna CEO Juergen Engel. "Our other ongoing late-stage programs with AEZS-108 and AEZS-130, as well as earlier-stage programs from our deep pipeline will continue as planned, with a sufficient cash position to pursue these programs for more than the next 12 months." 

Last month, a piece in Seeking Alpha predicting a successful outcome for the late-stage program triggered sharp spikes in both biotechs' share price. Today's savage correction helps underscore just how easy it is to be misled on a stock tip, particularly in biotech.

Kudos to Adam Feuerstein at TheStreet, though, who months ago predicted a late-stage failure. He has been adamant about a likely failure, noting in a co-authored study with Dr. Mark Ratain of the University of Chicago that micro cap companies have a dismal record when it comes to developing cancer drugs. 

- here's the press release
- get the story from Reuters