is still enrolling patients in late-stage studies of its experimental cancer drug Genasense, raising questions about the biotech firm's ability to meet aggressive timelines for the drug's development.

Genta CEO Ray Warrell has long refused to discuss the status of its clinical trial program, citing corporate policy. Instead, he has asked investors and analysts to take a "trust us" attitude -- insisting that the three Phase III Genasense trials are proceeding smoothly, that test results will be ready this summer, and that an approval application for Genasense will be filed with U.S. drug regulators by the end of the year.

An investigation by

has uncovered more than a dozen cancer research centers across the country still enrolling patients in all three Genasense clinical trials, which may be news to investors and Wall Street analysts, who have long assumed that Genta's clinical trials were nearing completion or were already finished.


was unable to find a hospital in the U.S. that had completed patient enrollment in a Genta-sponsored trial. Some of these hospitals say they expect to continue signing up patients for Genasense studies through this summer.

This prompted Warrell to acknowledge Thursday that patients are still being sought for all three cancer trials. But he deflects suggestions that this is a problem. "There are no headlines here," he says, adding, "Genasense's timelines are not slipping."

The fact that trials are still very much a work in progress raises two concerns: First, any conclusions reached about Genasense this summer will be preliminary at best, and subject to change once the trials are completed.

Second, the risk increases that Genta can't complete the work necessary to get Genasense to the Food and Drug Administration by year's end as expected.

Genta's stock is depressed

Genta closed Thursday at $12.34 per share. The stock has lost 33% since hitting its 52-week high of $18.49 on March 22, despite news on Monday that it inked a Genasense

marketing pact with French-German drug giant




Genta is currently conducting three Phase III clinical trials of Genasense, testing the drug's effectiveness in patients suffering from melanoma, or skin cancer, and two types of blood cancer -- chronic lymphocytic leukemia and multiple myeloma.

In early April, Genta shares

tumbled after Warrell acknowledged the company had increased the number of patients in its melanoma trial from 270 patients to 450 patients last summer. Warrell would not say whether the trial was now fully enrolled.

It isn't. Six cancer research centers contacted by


say they are still adding patients to the melanoma trial. These include Columbia-Presbyterian and New York University hospitals in New York, the M.D. Anderson Cancer Center in Houston, the Norris Cotton Cancer Center in New Hampshire and the University of Alabama Comprehensive Cancer Center.

Another six cancer centers contacted by


are also still enrolling patients in the Genasense Phase III trials for chronic lymphocytic leukemia and malignant myeloma. Both trials are supposed to enroll about 200 patients, again, with results ready by this summer.

Hospitals that are still accepting patients for these trials include the Siteman Cancer Center in St. Louis, USC/Norris Comprehensive Cancer Center in Los Angeles, the Fred Hutchinson Cancer Research Center in Seattle and the Fox Chase Cancer Center in Philadelphia.

And then there's the situation at M.D. Anderson, one of the most nation's most respected cancer research facilities. It has not even started enrolling patients in Genta's CLL trial, according to Dr. Michael Andreef, who works with Dr. Susan O'Brien, the center's principal investigator for Genasense in CLL patients. O'Brien was the lead author on an earlier Phase II study of Genasense in CLL.

"We plan on enrolling patients soon," says Andreef, adding, "The trial wasn't open earlier because of some technicalities here."

Andreef wouldn't elaborate, but M.D. Anderson doctors are actually steering prospective CLL patients away from the Genta trial and into another study testing the effectiveness of a competing drug on the disease, according to two doctors who have contacted the center in the past two weeks.

The Time Crunch

So, what does all this mean for investors? Delays in the Genasense clinical trials don't necessarily mean the drug isn't working -- this won't be known until all the data are analyzed. But it could weaken the foundation of the bull story on Genta, which reasons that three concurrent clinical trials gives the company much higher odds of success this summer, when data are ready for analysis. After all, most biotech companies only get one shot at hitting the jackpot because they typically run one late-stage trial at a time.

But the summer months are fast approaching and Genta is still enrolling patients, and as Warrell confirms, the company will not be able to render a comprehensive verdict on the efficacy of Genasense.

"We are not doing an interim analysis by the usual definition because that would force us to take a statistical penalty," he says. "But instead, we will look at top-line data that is available to management -- data that is uncertified with respect to complete data checking, but that still will be sufficient for us to make a filing decision."

But this explanation should put investors on guard because it opens up the possibility that Genta claims victory in a Genasense trial this summer even if a final, statistical analysis of all patients in the trial -- conducted at a later date -- finds the drug failing to meet its prospectively defined clinical endpoints. And meeting these endpoints is all that matters when the FDA reviews the drug.

Another possible concern: It can take three months or more to gather all the paperwork, analyze data and put the final wrap on a clinical trial after all patients have been treated. Investors should do the math -- any significant delays experienced by Genta could push the company past its year-end FDA filing deadline.

The recent weakness in Genta's stock, despite the positive news from the Aventis deal, suggests investors are concerned that the company's story might not be adding up. The uncertainty is exacerbated by Genta's no-disclosure policy on the status of its clinical trials, which has left investors in the dark about the slow patient enrollment.

And the company plans to unveil results from only one of its three clinical trials this summer -- sitting on results from the other two studies until later this year. Investors, then, won't know for sure if all these trials are completed, as expected, this summer.

A Battleground Stock

Investors hoping for guidance from Wall Street analysts should probably look elsewhere. None of the eight analysts following Genta have raised the patient enrollment issue. Recent comments made by Needham's biotech analyst Mark Monane are representative of the consensus opinion of sell-side analysts.

"Genta's flagship pipeline drug, Genasense, is undergoing three Phase III trials, all of which are expected to complete in the Summer 2002 time frame," Monane wrote in an April 30 research note. The Needham analyst has been telling clients that Genasense will be approved and launched in early 2003. He rates Genta a strong buy and his firm has a banking relationship with the company.

Genta is probably the biggest battleground stock in biotech right now. Short-sellers control more than 13 million shares, or 16% of its approximately 80 million fully diluted shares, which include outstanding warrants. On the long side, one well-known biotech fund manager, Lyndsay Rosenwald, owns more than 40% of the company through his firm,

Paramount Capital


The company is so controversial because Genasense relies on as-yet-unproven cancer-fighting technology called antisense. These kinds of drugs are actually snippets of genetic code that work by infiltrating cells and preventing expression of certain harmful proteins. Or, so the theory goes. Antisense technology has taken investors on a mostly downhill ride for more than 10 years, as waves of drugs failed to live up to the hype.

Many investors see Genasense as the antisense drug that will finally break the losing streak, based on earlier clinical studies that have shown some positive results. If Genta can get Genasense approved, it plans to market the drug as a chemotherapy sensitizer, which means it will be used to weaken cancer cells so existing chemo drugs can boost their cancer-killing power. Genta's Warrell has boldly predicted that the drug is a blockbuster -- a billion-dollar seller.

Genta's critics, and there are many out there, point to the same early research and say much of it is inconclusive at best. They also criticize Genta executives for being too secretive about its clinical trial program.

The final verdict on Genasense won't be known until Genta releases final results from its three Phase III clinical trials and the FDA gets a chance to rule on their efficacy. Just exactly when this will happen, though, now seems to be up for debate.