Ziopharm shares spike as PhIII palifosfamide reckoning looms

Another small-cap biotech company is about to find out whether it can beat the odds and pull off a successful late-stage cancer study. Ziopharm Oncology ($ZIOP) saw its shares spike yesterday after reporting that investigators now have enough progression-free survival events to come up with a Phase III report card on palifosfamide, which is angling for an approval to treat metastatic soft tissue sarcoma. 

Investors were buying in ahead of a late-March review of top-line data, even though the small-cap crowd will be buzzing about Ziopharm's chances at the finish line. As Adam Feuerstein at TheStreet has noted, the Feuerstein-Ratain study found that no cancer drug developer with a market cap under $300 million has had a success in Phase III. Move into the next market cap stage of $300 million to $1 billion, where Ziopharm sits at the low end, and the success rate is a marginal 17%. 

It's somewhat unusual for any biotech to go into a Phase III trial without a big partner to lend the initiative some credence. But Ziopharm CEO Jonathan Lewis tells Bloomberg that he's busily pursuing partnership talks, though he allows that it's unlikely at this point for anyone to sign on ahead of the data. 

"All options are on the table," Lewis told the business wire. "There are discussions going on right now as regards potential partnering."   

Add it all up and you have a classic high-noon gambling event for a small-cap biotech. If the data are positive and a partnership looms, the stock will likely move fast. Failure, without a net, would lead to the opposite outcome. Lewis is staying positive--at least as long as the data remain blinded.

"Reaching the target number of progression events for PICASSO 3 positions us one step closer to understanding palifosfamide's full potential for this significant unmet medical need," he said in a statement. "With a positive study outcome, palifosfamide has the potential to become the first new treatment option in nearly 30 years for patients with first-line metastatic soft tissue sarcoma."

- here's the release
- get the Bloomberg report

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