The negative results sent Poniard shares plunging 77% to $1.70 in Monday's pre-market trading session.

Small cell lung cancer patients treated with picoplatin had an 11% reduction in the risk of death compared to patients treated with best supportive care, but this survival benefit was not robust enough to be statistically significant.

"We are disappointed that the trial did not meet the primary endpoint. The data indicates that more patients on the best supportive care arm received chemotherapy following progression than those on the picoplatin arm, and we believe that this may have been a significant factor contributing to the trial outcome, as picoplatin appeared to demonstrate a trend toward a survival advantage," said Poniard CEO Jerry McMahon, in a statement.

The possibility that chemotherapy used as a third-line treatment after progression would hurt picoplatin's chances was one of the major risks of the phase III study identified by Poniard bears going into Monday's data release.

Picoplatin is a next-generation platinum chemotherapy drug designed to overcome resistance to prior platinum therapy. The drug may also cause less nerve-related toxicity.

The phase III study, dubbed "SPEAR," compared treatment with picoplatin against best supportive care in second-line small cell lung cancer patients. These were patients with advanced, progressive disease after treatment with a front-line platinum agent. The primary endpoint of the study was overall survival.

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