This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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

The GTx Cancer Muscle-Wasting Drug Studies Will Fail. Here's Why

Stocks in this article: GTXICLSNMRKZIOP

MEMPHIS, Tenn. ( TheStreet) -- Before the end of the current quarter, GTx (GTXI) is expected to announce top-line results from two phase III studies of a cancer-related muscle wasting drug known as enobosarm. And once again, one of my favorite fund manager sources is short GTx because he expects the enobosarm studies to fail.

This is the same fund manager who was most recently short Ziopharm (CLSN), Celsion (CLSN) in anticipation of negative clinical trial data. He was correct" both times. Past performance doesn't always predict future results, but his track record is pretty damn good.

GTx shares are up 54% year to date, trading most recently at $6.96. Analysts who follow the company are bullish and have been telling clients to expect positive enobosarm study results. In other words, this is the ideal situation to make a contrarian bet on GTx, which is what my fund manager source is doing. He's prohibited by his fund's rules from being quoted by name.

Let's go over the short thesis on GTx and enobosarm but first some important background information.

Enobosarm is a selective androgen receptor modulator (SARM), a class of drugs designed to mimic the positive effects of testosterone or steroids but without the side effects or safety risks that can come with prolonged exposure.

GTx is developing enobosarm as a treatment for cancer cachexia, a progressive loss of weight and muscle mass which afflicts cancer patients. There are no currently approved treatments for cancer cachexia, but not for lack of trying. Over the years, several different classes of drugs, including steroids and testosterone, have been tried but none have demonstrated a significant clinical benefit. The challenge is finding a drug that will both increase muscle mass and improve muscle performance or function.

FDA will not approve a drug for cancer cachexia based on an increase in muscle mass alone. The drug must also improve a patient's life by demonstrating an increase in muscle function.

The design of GTX's two phase III cancer cachexia studies is fairly simple. Patients undergoing first-line chemotherapy treatment for non-small cell lung cancer with an accompanying diagnosis of cachexia are randomized to receive a daily, 3 mg dose of enobosarm or a placebo. After three months, the patients are assessed on two co-primary endpoints: 1) change in lean body mass (measured using an x-ray scan); and 2) physical function, defined as a 10 percent or greater improvement in the stair climb power test.

Enobosarm has to meet both co-primary endpoints with statistical significance for the studies to be successful.

Signals pointing to the failure of phase III clinical trials can often be found by digging through data from previously conducted clinical trials. In the case of enobosarm, GTx conducted a phase IIb study several years ago which enrolled 159 patients with assorted forms of cancer (a subset had lung cancer.) All the patients entered the study with a diagnosis of cachexia. As reported by GTx, treatment with enobosarm dosed at 1 mg and 3 mg increased lean body mass and improved muscle function compared to placebo.

Enobosarm's benefit was greatest at the 3 mg dose and in the subset of lung cancer patients, so this dose and patient group were used in the ongoing phase III studies.

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!
DOW 17,039.52 +65.21 0.38%
S&P 500 0.00 -2.75 -0.14%
NASDAQ 4,540.8420 -8.3840 -0.18%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

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