GenVec Stock Hit by Pancreas Study's Details

The fact that the median survival for both arms of the study are the same already and that survival over time actually favors the control arm over TNFerade are not positive indicators.

On a conference call Wednesday morning, GenVec's vice president of product development Mark Thornton compared the interim hazard ratio for TNFerade of 0.75 favorably with similar hazard ratios observed in studies of other approved and successful cancer drugs, including Genentech's (DNA Quote) Avastin, OSI Pharmaceutical's (OSIP Quote) Tarceva and ImClone System's (IMCL Quote) Erbitux.

Thornton is right in that if TNFerade can produce a hazard ratio in the ballpark of 0.75 at the final analysis of the study, it will likely be a success. But based on all the data generated and announced so far, including Wednesday, how likely is that?

In a phone conversation after the company's conference call, Thornton said he remains optimistic about TNFerade and feels strongly that the survival benefit observed at this first interim analysis can hold up over time.

Pancreatic cancer is historically been a disease impervious to treatment, so to see any improvement in overall survival is encouraging, he added.

The biggest worry for GenVec right now is not whether TNFerade will ultimately succeed, but finding a development partner for the drug to allow the company to remain in business.

At the end of the third quarter, GenVec had $22.5 million in cash, enough to last into the third quarter 2009. Doug Swirsky, GenVec's chief financial officer, says signing a deal with partner to help offset the cost of the TNFerade study and provide the company with some financial cushion is a top priority.

In the current bear market, where access to capital is pinched, any biotech or drug company with less than a year's cash on hand is in a very precarious position.

Investors understand that, which is why Wednesday's TNFerade data, whether viewed optimistically or not, is probably taking a back seat to worries over whether GenVec will find the partner and cash it needs.