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Biotech Sonus Could Soar on Drug Results

BOSTON -- Sonus Pharmaceuticals (SNUS) is nearing a make-or-break milestone for its experimental cancer drug.

The small Seattle-based biotech firm is preparing to release top-line results from a pivotal phase III study of Tocosol paclitaxel, a reformulation of the broadly used chemotherapy drug paclitaxel, which is known by its brand name Taxol.

Sonus' management has indicated that the phase III data should be ready at the end of September, so we're a month away from what should be a significant stock-moving catalyst.

I called this a make-or-break moment for Sonus -- and I mean it. At its Monday closing price of $3.85, Sonus shares could double if its drug is a success. A failure, of course, will send Sonus shares tumbling. The company has about $1.20 a share in cash.

The Sonus story is fairly straightforward: The company has developed a proprietary drug delivery technology using vitamin E that allows chemotherapy drugs to be administered much more easily, with less toxicity and fewer side effects. Superior efficacy is also a possibility.

Tocosol paclitaxel, or TocP, can be administered to a patient in 15 minutes, compared to the three-hour infusion time for normal Taxol. TocP also doesn't require patients to be pretreated with steroids either, like Taxol does.

Sonus' drug should also be less toxic than ordinary Taxol, most importantly with regard to neuropathy, a side effect affecting a patient's peripheral nerves that can cause tingling, numbness and pain.

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