This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Exelixis Falls on FDA Prostate Cancer Trial Design Setback

Updated with new information, stock price.

SOUTH SAN FRANCISCO, Calif. ( TheStreet) -- Exelixis (EXEL - Get Report) faces the possibility of a lengthy delay in the approval process for its experimental prostate cancer drug cabozantinib because U.S. regulators are refusing to sign off on the design of a pivotal clinical trial.

The setback introduces new risk into the development of the promising prostate cancer drug, which caused investors to flee Exelixis. Shares are down $2.97, or 38%, to $4.75 in Tuesday trading following Monday night's announcement.

Exelixis had been hoping to reach agreement with the U.S. Food and Drug Administration that a relatively small and quick phase III study of cabozantinib demonstrating pain reduction in very late-stage prostate cancer patients would be sufficient to get the drug approved.

But FDA balked at endorsing this strategy and refused to grant Exelixis a so-called Special Protocol Assessment for the cabozantinib pain study, Exelixis disclosed Monday night.

"This was surprising and unexpected," said Exelixis CEO Michael Morrissey, referring to the FDA's decision, on a conference call.

Exelixis has decided to push ahead and conduct the cabozantinib study with a pain reduction endpoint without an FDA endorsement. The company will hope that overwhelmingly positive data will convince FDA to approve cabozantinib early.

If FDA balks at this "go fast" approach to cabozantinib approval -- and Monday's announcement certainly suggests FDA opposition to this plan -- Exelixis will have to wait for results from a larger, follow-on phase III study in prostate cancer that will seek to prove cabozantinib can prolong survival.

Exelixis suggested Monday night that cabozantinib could still be approved in 2014 even if two studies are required. Analysts like Canaccord Genuity's George Farmer are skeptical about that timeline, predicting cabozantinib's approval could be pushed back to 2015 or 2016.

Exelixis decision to rely on pain relief as a primary endpoint for a pivotal study of cabozantinib has been controversial. All recently approved prostate cancer drugs -- Johnson & Johnson's (JNJ - Get Report) Zytiga, Sanofi's (SNY - Get Report) Jevtana and Dendreon's (DNDN) Provenge -- used a survival benefit as the basis for approval. Still experimental prostate cancer drugs from Medivation (MDVN - Get Report) and Algeta both employed overall survival in their respective phase III studies.

Exelixis believes demonstrating cabozantinib's ability to shrink or eliminate the spread of prostate cancer to bone, which causes patients a lot of pain, is a clinically significant benefit and enough to convince FDA to approve the drug. To support their position, Exelixis points to the FDA's own guidance stating prostate cancer drugs can be approved on the basis of pain resolution. Mitoxantrone was approved for prostate cancer using a pain reduction endpoint in 1996.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DNDN $0.06 -6.02%
EXEL $2.70 0.00%
JNJ $101.55 0.00%
MDVN $133.94 0.00%
SNY $50.24 0.00%


DOW 17,976.31 +263.65 1.49%
S&P 500 2,086.24 +25.22 1.22%
NASDAQ 4,947.4410 +56.2220 1.15%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs