Cell Genesys ( CEGE) stopped a second trial of its prospective prostate cancer vaccine GVAX, putting an official hold on all development of what had been its lead pipeline product, and said it would cut 75% of its workforce. Shares of Cell Genesys, which plummeted to less than a dollar earlier this year, sank another 74% Thursday, dwindling to 17 cents. The South San Francisco, Calif., biotechnology company ended a trial, dubbed VITAL-2, earlier this year on the recommendation of an independent data monitoring committee. A safety review found that 114 deaths had occurred in the study, 67 of them in the GVAX arm and the other 47 in the control group. The newest trial Cell Genesys halted, dubbed VITAL-1, was terminated after an analysis found the study had less than a 30% chance of success of meeting its primary goal of prolonging survival. Because of the research setbacks, the company is cutting its staff of 290 by roughly 75% by the end of the year, with more reductions expected in the first half of 2009. The company will take a restructuring charge of $12.8 million in the fourth quarter. As of Sept. 30, the company had roughly $150 million in cash, and it expects to have about $128 million by year-end. Cell Genesys has a development and commercialization collaboration with Japanese pharmaceutical company Takeda for GVAX in prostate cancer. Cell Genesys said the companies now plan to review the program.
Stocks soar as the gross domestic product rises at an annualized rate of 3.5% in the third quarter and continuing jobless claims fall. Gregg Greenberg recaps the action in The Real Story video (above).