Questions Arise as Genta Expands Cancer Drug Trial
Updated from 3:38 p.m. EST
Is Genta (GNTA) running into trouble with its highly anticipated cancer drug Genasense?
That's the buzz making its way around Wall Street trading rooms over the last week, as word leaked out that the biotech company increased the number of patients in a pivotal, late-stage clinical trial testing Genasense in patients with skin cancer, or melanoma. The buzz turned negative Thursday afternoon, when the company refused to discuss the issue during a conference call.
The implications of this resizing -- confirmed by several sources familiar with the trial -- are not clear. Adding patients to a clinical trial in progress can be a red flag, warning of negative results. But it's just as possible that there's nothing wrong whatsoever, and in fact, increasing patient enrollment could be an early tip-off that Genasense is working well.Company officials have so far refused to talk directly to the issue, and that has only added to the mystery. Genta shares fell about 16% on Tuesday and Wednesday as Wall Street biotech traders swapped theories -- mostly negative -- about what was going on with the Genasense study. Thursday morning, Thomas Weisel Partners biotech analyst Patrick Mooney released a note defending Genta, stating that patients have been added to the melanoma trial, but that this was preplanned, approved by the Food and Drug Administration and is a likely positive. (Mooney rates Genta strong buy, and his firm makes a market in the company's stock.) But Genta shares fell sharply lower Thursday afternoon after CEO Ray Warrell refused to answer multiple questions about the trial re-sizing on a conference call sponsored by UBS Warburg. The issue dominated the hour-long call, and the lack of a clear answer clearly spooked investors. Genta closed down $2.61, 16.5% to $13.20. Genta is currently conducting three late-stage clinical trials of Genasense, testing the drug's effectiveness in patients suffering from melanoma and two types of blood cancer -- multiple myeloma and chronic lymphocytic leukemia.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV