stock plummeted Wednesday as investors reacted to an advisory panel's unanimous
recommendation that the Food and Drug Administration wait for more information before approving prostate cancer drug satraplatin (Orplanta).
Speculation began last week when the Oncology Drugs Advisory Committee released a brief in preparation for this week's meeting that questioned the research's methodology. According to trial data, satraplatin patients lived a median of 11.1 weeks without their disease progressing, vs. 9.7 weeks for placebo patients. But ODAC was concerned with how the disease progression and pain were measured -- and whether this was acceptable for the drug's accelerated approval.
Worries were confirmed when all 12 members of the panel voted in agreement that the agency should wait for the overall survival data.
"We believe the panel didn't have time to study our very strong data that show even in the worst-case scenario, there is a highly positive effect," GPC's CEO, Bernd Seizinger, said in a conference call Wednesday. "As you may have noticed, there were no radiologists on this panel." He remarked that they did have a world-class radiology expert with them but that he didn't have a chance to speak.
The company said that prior to last week it was unaware that the review staff had issues with its implementation of the endpoint in question. "That came to us as it came to you -- in the briefing document," Seizinger said.
Contributing to the bad timing, the expected date of the survival data has also been pushed back. Seizinger said that the most recent assessment showed a slowing of death rates and thus he expects top-line data in about six months, a few months later than GPC had previously anticipated.
"Based on the current guidance regarding the survival analysis of the SPARC trial, we estimate the potential launch of satraplatin to occur in early 2009," Ren Benjamin, an analyst at Rodman and Renshaw, said in a report Wednesday.
, which licensed the drug to GPC and has the option to co-promote it in the U.S., fell nearly 30% Tuesday in regular and postmarket trading. Lazard analyst Megan Murphy lowered Spectrum's price target to $6 from $11 in a report on Wednesday.
"Although some panel members shared their optimism that satraplatin will show overall survival benefit, we are removing satraplatin from our model at this time, given increased concerns about the overall health of the subjects, possibly supported by the multiple pushbacks in the release of this data," said Murphy in the Lazard report.
Similarly, Lazard analyst Mattew Osborne lowered the price target for
, which has the exclusive rights to market satraplatin in Europe, to $32 from $42 to account of the delay.
As for GPC, "We are in a solid financial position and have sufficient cash to get to the survival endpoint," CEO Seizinger said.
Of course, all of this is based on the recommendation of the ODAC panel. The FDA isn't committed to any outcome, though it does typically follow such recommendations. It's expected to make a decision in mid-August.
"I believe the FDA has the full range of options available to it come the mid-August date. So they could issue an approvable letter, they could overrule the panel and give us an approval. They could decide to issue a not-approved letter," said GPC during the conference call.
As an analyst on the call pointed out, a non-approvable letter would mean the company would have to submit the application again after the final survival data became available and the clock would essentially start over.
GPC fell $6.87, or 33%, to $13.49 in recent trading Wednesday and Spectrum lost 70 cents, or 14.6%, to $4.10. Pharmion gave up just 37 cents, or 1.5%, to $24.25.