Telik (TLK) on Dec. 26 said late stage trials of its new cancer treatment Telcyta did not show that it significantly improved patients' odds of survival.
The Palo Alto biopharmaceutical company had hoped Telcyta might help people who are suffering from non-small cell lung and ovarian cancer. But two studies didn't show that when Telik compared its drug to other treatments.
In another study of how Telcyta made ovarian cancer patients respond to tumors, Telik noted "a major discordance" between a clinical and an independent radiology review. So Telik had to discontinue 25% of the people in the study earlier than expected.
"These results are extremely disappointing," said CEO Michael Wick M.D., PhD. Telik is conducting more analyses of the data from its three trials and plans to discuss those results with its advisers.
After the news, Telik's shares plummeted 70.7% to $4.76 in early afternoon trading on the Nasdaq.
Stifel Nicolaus analyst Edward Nash downgraded the stock to sell from buy based on the negative outcome of Phase III ASSIST trials for ovarian cancer and non-small cell lung cancer. He does not anticipate favorable outcomes from ongoing ASSIST 5 and 6 trials either, based on today's news, he said in a research note.
Nash noted that given that 100% of his valuation is based on Telcyta and his view of Telintra for myelodyspalstic syndrome, he believes there exists no inherent value on Telik's technology, and he would therefore be sellers of the shares. He said he's currently unable to see profitability for Telik in the foreseeable future without commercialization of Telcyta.