NeoPharm brain-cancer trial backed; shares soar
3:51 p.m. 12/27/2005
(Adds analyst comment, updates shares)
NEW YORK, Dec 27 (Reuters) - NeoPharm Inc. (NEOL) on Tuesday said an independent panel found a late-stage clinical trial of its experimental drug for an aggressive form of brain cancer should continue as planned, sending shares up more than 50 percent.
The recommendation to continue the trial of the drug, IL13-PE38QQR, and not change the study's design bodes well for the drug's eventual approval, said Vinny Jindal, an analyst with Wedbush Morgan Securities.
"The fact that they didn't have to resize the trial indicates the trial is on its way to reaching statistical significance," Jindal said.
"If IL13 is approaching statistical significance, it demonstrates the drug is highly potent," he added.
Waukegan, Illinois-based NeoPharm is studying its drug as a potential treatment for glioblastoma multiforme, an aggressive form of brain cancer that is considered incurable.
NeoPharm said it remains "cautiously optimistic" for a positive final outcome of the trial, called Precise.
Merrill Lynch analyst David Munno said Wall Street generally had been expecting that the company would need to enroll more patients in the trial.
"This outcome is better than the street was expecting," Munno wrote in a research note. The company said the independent panel is expected to conduct an interim efficacy analysis late in the second quarter. If the results are considered statistically significant, NeoPharm said it would then weigh proceeding with a regulatory submission.
The last two drugs approved for this condition did not reach their primary goals in initial studies for approval, but still won regulators' blessing because they represented some benefit for the severe condition, Jindal said.
Considering that history, if the Precise trial falls a little short of statistical significance, "even that trajectory we think is sufficient to gain approval," Jindal said.
The Precise trial is designed to compare overall survival, drug safety and quality of life of patients receiving IL13 with patients receiving MGI Pharma Inc.'s (MOGN) Gliadel Wafer. NeoPharm said 294 patients enrolled in the Phase 3 trial.
Shares of NeoPharm jumped $4.11, or 51.7 percent, to $12.06 in late trading on the Nasdaq.
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