There were no apologies, no statements of regret from Telik ( TELK) management on Wednesday night's quarterly conference call. That's not necessarily surprising, but it is disappointing. After all, Telik CEO Michael Wick and Chief Medical Officer Gail Brown (who's also Wick's wife) are involved in one of the most serious ethical breaches of clinical trial research that I've ever come across in biotech. In June, Telik
disclosed the results of two phase III clinical trials in which patients given the company's experimental cancer drug Telcyta actually died faster than similar patients in the studies' control arms. Telcyta was supposed to benefit these cancer patients; instead, desperate cancer patients died quicker than they should have. Wick, Brown and the rest of Telik's management team knew the disastrous results of the Telcyta clinical trials back in December 2006 -- five months before it was disclosed publicly -- yet they made the decision to keep the information secret. Telik didn't warn patients in other ongoing Telcyta studies, the company didn't tell the U.S. Food and Drug Administration about the deaths; it didn't tell investors or anyone else outside the company. The FDA has put a hold on further Telcyta clinical trials and the agency is investigating Telik over its failure to disclose the patient deaths to the agency in a timely manner. With all this hanging over the heads of Wick and Brown, you'd think they'd say something on Wednesday night's conference call -- the first time since June that Telik management has spoken publicly.
Instead, Wick raced through a reading of a carefully worded script in which he essentially said that control arm patients in the Telcyta studies lived longer than the company expected. No regrets, no apologies, and nothing about why the company kept this information secret for five months. The most amazing thing about the conference call was that Wick and Brown actually discussed plans to conduct new phase II studies of Telcyta! This is a drug that has failed three phase III trials (including the two discussed above in which patients were actually harmed by the drug.) Yet Wick and Brown believe they should run new, midstage Telcyta clinical studies, and they think the company can attract a larger partner to take over the drug's development, give Telik money for Telcyta and eventually run more phase III studies and get the drug approved. Wow. Is that just denial or is it the very definition of chutzpah? Take your pick. The stock closed Wednesday at $2.87, just slightly more than the per-share value of the company's cash on hand. Telik shares have now lost 50% of their value since June and 82% of their value since December. The market is giving little or no value to Telcyta or its other cancer drug, Telintra. Needless to say, Telik is not an investable biotech company, and it will not be until Wick, Brown and the rest of the company's management team are thrown out and Telik can cleanse itself from this Telcyta taint. As for the company's financials, Telik reported a net loss of $14.3 million, or 27 cents per share in the second quarter. The company generates no revenue. Telik ended the quarter with $114.5 million in cash, cash equivalents and investments.