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Investors Twice Shy on Cell Therapeutics

Paclitaxel is a great cancer-fighting drug, but at the cost of significant side effects. Xyotax combines paclitaxel with a proprietary molecule that is supposed to maintain, possibly enhance, paclitaxel's efficacy while reducing toxic side effects and the time required to administer the drug.

Tracking Stellar 3

Cell Therapeutics is putting Xyotax through its paces in a series of phase III studies. The most advanced of these studies, dubbed Stellar 3, is enrolling newly diagnosed non-small cell lung cancer patients to determine whether the combination of Xyotax and the chemo drug carboplatin increases survival compared with paclitaxel and carboplatin.

Though the lung cancer patients enrolled in this study haven't previously received chemotherapy, their cancer was diagnosed late, and they are in relatively poor health. On a performance scale of 0-5, Stellar 3 patients are ranked a 2, which means they can walk and care for themselves most of the time, but are too sick to work at all. (A patient with a performance status of 0 is fully active, while a performance status 5 patient is deceased.)

Results from the Stellar 3 study are expected in early 2005. Normally that's far enough in the future for investors not to get fixated on the event. But in this case, the data were expected in the fourth quarter of this year. Cell Therapeutics pushed back the projected data release because patients in the study seemed to be living longer than expected.

While taking care not to draw specific conclusions, Cell Therapeutics executives have been dropping hints in public that this Stellar 3 timeline pushback, at the very least, suggests that Xyotax is working. And they've done nothing to suppress comparisons between the Stellar 3 study and the recently concluded (and successful) OSI Pharmaceuticals (OSIP) study for its lung cancer drug Tarceva. Results from the Tarceva study were also delayed, as it turns out, because it showed that Tarceva boosted survival. (OSI's stock price, naturally, soared on the news.)

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