Genta shares fall on delay of cancer drug approval
By Toni Clarke
NEW YORK, June 3 (Reuters) - Shares of Genta Inc. (NasdaqNM:GNTA - News) fell as much as 19 percent on Monday after the company said it will delay filing for regulatory approval of its cancer drug while it conducts more detailed tests.
The company said on a conference call with investors it expects to file for approval of the drug by the middle of next year. Some analysts said they expect the delay to stretch into late 2003 or early 2004, close to a year later than expected.
Raymond Warrell, Genta's chief executive officer, said the company had decided to expand a late-stage trial of its Genasense drug for skin cancer from 450 patients to 750 patients on the advice of partner Aventis SA (Paris:AVEP.PA - News).
The move comes amid a slew of bad news from biotechnology companies as regulators reject or send back for more testing one experimental drug after another. Expanding trials of Genasense could boost the drug's chances of success, Warrell said.
Berkeley Heights, New Jersey-based Genta's shares fell $1.33, or 14.4 percent, to $7.92 in midday trading on Nasdaq. Earlier in the day they fell as low as $7.48.
In April, Franco-German Aventis agreed to pay $480 million for rights to Genasense, which is being developed for skin cancer, leukemia and multiple myeloma, a cancer of the bone marrow. Warrell said it is likely that trials of the leukemia and myeloma drugs will be also be delayed.
"We're going to take the same cautious view of those trials as with the melanoma trial," Warrell said. "It is not unreasonable to assume the same will happen in those trials."
Several analysts cut their ratings on Genta, includingAndrew Gitkin of UBS Warburg, who downgraded the company to "hold" from "buy," and Jessica Greenstein at ThinkEquity Partners, who reduced her rating to "buy" from "strong buy."
"Genta's recently inked partnership with Aventis provided the company with tremendous benefits," said Greenstein. "In return, Aventis gained significant control over the development of Genasense, including the timing of Genasense's NDA (new drug application) filing."
Genasense is one of a small number of drugs being developed with antisense technology. Unlike conventional drugs, which interact with faulty proteins, antisense drugs aim to prevent the proteins being created in the first place. |
