(UPDATE) DepoTech Shares Plummet After FDA Panel Rejects AntiCancer Drug
..here is the full text of the article
.......i think that selling at $4 does not make a lot of sense to me--yes, getting out at 6-7 is a happier scenario. but it may be too late to sell in the short term.
.......... the stock will be dead money for a year--but then with the aisan contagion many stocks may be dead money. i am going to hold for a while and try to recoup some more losses.yes, i may need to wait till next summer!
.........good luck to all sufferers
Dow Jones Online News, Friday, December 19, 1997 at 14:18
EMERYVILLE, Calif. -(Dow Jones)- Shares of drug-delivery concern
DepoTech Corp. plunged about 70% Friday after a Food and Drug
Administration advisory panel wouldn't recommend approval for the
company's cancer drug DepoCyt.
DepoTech said it was disappointed by the panel's decision Thursday.
The panel said clinical trials weren't sufficient to prove the drug's
effectiveness. The company said it will review the results of its
studies and trials with the FDA.
DepoTech, based in San Diego, developed DepoCyt with Chiron Corp.
(CHIR), the world's second-largest biotechnology company. In afternoon
trading, Nasdaq-listed shares of DepoTech (DEPO) were down $9.25, or
71%, at $3.813 in heavy trading. Shares of Chiron (CHIR) were down 56.3
cents, or 3.1%, at $17.563.
DepoCyt is an injectable sustained-release version of the
chemotherapeutic agent cytarabine, which is used to treat patients with
neoplastic meningitis resulting from cancerous tumors. The drug is based
on DepoTech's proprietary DepoFoam technology. DepoFoam particles -
which encapsulate specific drugs - carry drugs into a patient's system
through injection. The capsules are nontoxic and biodegradable, and
generally well-tolerated by patients.
Analysts had predicted U.S. sales of the drug could have reached $100
million, with international sales adding another $50 million annually.
"I think it's somewhat of an overreaction," said Mary Ann Gray,
analyst at SBC Warburg Dillon Read & Co., of the stock selloff.
"Clearly, the FDA panel rulling was a negative, but I think that this by
no means calls into question their underlying technology."
Despite the negative news and her own lowered earnings estimates and
investment rating on the stock, Gray said she thinks DepoCyt will
eventually be approved. She projected U.S. approval may take a year or
more.
Edward Erickson, DepoTech president and chief executive, said that,
while the company planned to take steps toward future FDA approval, it
was too early to say when that nod might come.
Gray predicted the stock would trade well off its highs until
DepoTech releases more trial information on DepoCyt and other drugs in
its development pipeline.
A final decision on DepoCyt will be made by the full FDA. The agency
generally follows the recommendation of its advisory panels, although it
isn't required to do so.
FDA panelist Derrek Raghavan said he was unable to vote in favor of
DepoTech's application because the number of those studied in the trial
was too small. However, Raghavan said DepoCyt may be an effective
second-line therapy for neoplastic meningitis because it appears to be
as effective as methotrexate, which is currently widely used. However,
DepoCyt appears to be more toxic.
Kim Margolin, another FDA panel member, also said the DepoTech's
study wasn't large enough for her to form an accurate opinion, and she
said the company should have performed some type of confirmatory study.
The panel generally agreed that it could revisit the data once
DepoTech submits additional clinical data from clinical studies testing
DepoCyt in lymphoma and leukemia patients.
Copyright (c) 1997 Dow Jones & Company, Inc.
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