This Day On The Street
Continue to site
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

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

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 - Get Report), Celsion (CLSN - Get Report) 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

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
Only $9.95
14-Days Free
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
SYM TRADE IT LAST %CHG
ZIOP $9.47 0.32%
CLSN $2.63 -6.08%
GTXI $1.08 -1.82%
MRK $59.38 -1.20%
AAPL $132.54 0.88%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs