U.S. drug regulators have asked for more time to consider the approvability of

SuperGen's

(SUPG)

experimental pancreatic cancer drug Orathecin, the company said Monday.

The Food and Drug Administration requested another 90 days to review Orathecin, which pushes back the approval decision date to Feb. 26, 2005. Shares of SuperGen rose 11% on the news, mainly because investors had largely written off Orathecin's chances for approval given the drug's mixed clinical data package. But if the FDA was entirely unwilling to approve the drug, the agency could have rejected it.

SuperGen is seeking Orathecin approval as a treatment for patients with pancreatic cancer who had failed previous chemotherapy therapies, mainly the drugs gemcitabine and fluorouracil, also known as 5-FU. But Monday, the company said it provided the FDA, at the agency's request, additional clinical data on Orathecin in patients with newly diagnosed (front-line) pancreatic cancer who had yet to receive any chemotherapy treatment.

Pancreatic cancer has a 99% mortality rate, the highest of any cancer. Patients who do not respond to chemotherapy can typically expect to live two or three months. Approximately 31,860 Americans will be diagnosed with pancreatic cancer this year and 31,270 will die from the disease, according to the American Cancer Society.

Given the severe nature of this disease and the shortcomings of currently approved drugs, it may not be surprising to see the FDA willing to accept less-than-stellar clinical data for Orathecin. And that's pretty much what SuperGen has to offer.

In one of three phase III pancreatic cancer clinical trials, SuperGen enrolled patients who had already failed chemotherapy, testing Orathecin against best standard of care, which could have been more chemotherapy or supportive care. The results, released last year, showed that patients taking Orathecin survived for 108 days, compared to 94 days for patients given supportive care. This outcome was not statistically significant; the study failed.

But at the time, SuperGen said about half of the patients receiving supportive care "crossed over" to also receive Orathecin and lived for 147 days, compared to only 60 days for supportive care patients who didn't receive Orathecin. This survival benefit was statistically significant and bolstered the case for approval, the company said. Furthermore, Orathecin was shown to shrink tumors better than supportive care.

Investors, however, largely disregarded this efficacy claim given that the FDA more often than not disregards such post-hoc analyses as a basis for drug approval. The bear case on Orathecin was further bolstered when SuperGen filed Orathecin for approval in January 2003 but the FDA decided to grant the drug a standard 10-month review, instead of a priority six-month review.

Monday, SuperGen said it has submitted to the FDA additional clinical data on Orathecin from two other clinical studies, including one that tested the drug head-to-head against gemcitabine in front-line pancreatic cancer patients. SuperGen has yet to make public any details from this study, except to say that Orathecin failed to demonstrate a statistically significant survival benefit over gemcitabine.

"We now believe that the FDA wants to find a way to approve the drug

Orathecin on a conditional basis; therefore we are more than just 'cautiously' optimistic," writes Rodman & Renshaw analyst Elemer Piros in a Monday research note. Piros rates SuperGen market outperform and his firm has a banking relationship with the company.

SuperGen has another drug, Dacogen, filed with the FDA for the treatment of myelodysplastic syndrome, a cancer-like disease of the bone marrow. The future of Dacogen has largely driven investor interest in SuperGen.

Please note that due to factors including low market capitalization and/or insufficient public float, we consider SuperGen to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

Adam Feuerstein writes regularly for RealMoney.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. He invites you to send your feedback to

adam.feuerstein@thestreet.com.