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Dendreon: Biotech Stock Mailbag

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Jack S. brings up a strange case of non-disclosure at GTx (GTXI) concerning the company's experimental hormone drug Ostarine, which is (was?) partnered with Merck (MRK). " Merck terminated the development of Ostarine, as reported in its 10-K. My calls to GTx have not been returned. This would seem to be a huge blow to GTx and I'm shocked they haven't made a press release on this as of yet."

On page 128 of its annual report filed March 1 with the SEC, Merck (newly merged with the old Schering-Plough) says this about Ostarine, referred to here as MK-2866:

"Also in 2007, Old Merck and GTx, Inc. entered into an agreement providing for a research and development and global strategic collaboration for selective androgen receptor modulators ("SARMs"), a new class of drugs with the potential to treat age-related muscle loss (sarcopenia) as well as other musculoskeletal conditions. Merck has discontinued internal development of MK-2866 (which is a SARM) under this agreement, and is currently discussing next steps with GTx."

In response, GTx spokesman McDavid Stillwell told me, "We have no comment yet, but we will have one. I'm not sure when, but fairly soon."

Ostarine (MK-2866) is a very important drug in GTx's pipeline and the collaboration with Merck helped validate the drug and added to GTX's market valuation. GTx's stock price has taken a hit this week as word of Merck's exit leaked out.

GTx announces fourth-quarter financial results on March 15, so perhaps the company will say something then about the fate of Ostarine.

-- Reported by Adam Feuerstein in Boston.

Follow Adam Feuerstein on Twitter.

Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.
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