Updated from Oct. 3
The companies made the announcement Monday after the markets had closed, saying an independent data and safety monitoring board recommended halting testing on the drug Canvaxin.
"The data are unlikely to provide significant evidence of an overall survival benefit for patients" taking Canvaxin vs. those getting a placebo, the companies said.The results also prompted CancerVax to say it would cut payroll by more than half to roughly 80 employees from 183. In early trading Tuesday, CancerVax's stock plunged $1.30, or 44.5%, to $1.62 and well below the 52-week low of $2.70. In less than 30 minutes after the opening bell, nearly 850,000 CancerVax shares had been traded, or more than 17 times the average daily trade for the last three months. Shares of Serono were off 15 cents, or 0.9%, to $16.35. "This news is particularly disappointing because we understand the devastating impact of this disease on patients with advanced-stage melanoma, as well as their families and friends," said David F. Hale, president and CEO of Carlsbad, Calif.-based CancerVax, in a prepared statement. His company licensed Canvaxin to Serono, of Geneva, Switzerland. Hale said the workforce reduction "will allow us to focus our resources on the development of the other product candidates in our pipeline and, potentially, to explore the acquisition of additional promising products and technologies. We will continue to review our resource requirements as we refine our strategies over the coming weeks." CancerVax said it would discontinue all work on Canvaxin, which suffered its second clinical research defeat in six months. In April, the companies reported no significant difference between Canvaxin and a placebo for people with the most advanced form of melanoma. At the time, they said they were still assessing whether Canvaxin would help Stage III cancer patients. Although the companies announced the test results one hour after the markets had closed, CancerVax's stock started falling sharply Monday about 90 minutes before the closing bell.