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GTx Shares Continue Fall on FDA Request

Tue, 11/03/2009 - 5:56am
NEW YORK (AP) — Shares of biotechnology GTx plunged for a second day Tuesday as the development outlook for its lead drug candidate dims following a new regulatory request for data. The stock fell 36 cents, or 7.9 percent, to $4.20 in morning trading. Shares fell about 50 percent to close at $4.56 Monday. On Monday, the company said the Food and Drug Administration asked for additional late-stage study data on the company's bone drug candidate toremifene to if for consider approval. The drug is aimed at preventing bone fractures in men who are being treated for prostate cancer by undergoing androgen deprivation therapy. GTx is seeking approval for an 80-milligram dose of the drug. The FDA identified two deficiencies in the company's application. It now wants results from a second late-stage study, along with additional information. "This should be game over for toremiffene 80-milligram," said Rodman & Renshaw analyst Simos Simeonidis in a note to investors late Monday. He said the FDA "essentially" rejected the drug. He said the drug has some potential safety issues, including blood clots. "This is, unfortunately for shareholders, close to a worst case scenario for GTx, and as close to a rejection as you are going to get from the agency given the new way it is communicating its rulings," he said. He said that the drug showed some benefit, but that didn't seem significant enough to counterbalance the side effects. He reaffirmed a "Market Perform" rating, saying the next catalyst for the stock will be the release of study data for the 20-milligram dose of toremifene during the first quarter of 2010. He expects a combination of cost-cutting and dilutive financing or partnerships for the company, as it will likely need to secure more funding to continue operating other drug development programs. Meanwhile, Leerink Swann Research analyst Howard Liang also reaffirmed a "Market Perform" rating, saying the company will likely have to conduct at least one additional late-stage study on the drug, which could take five years. "Even GTx management admits that it may not be worthwhile," he said in a note to investors. Liang said he was not as surprised by the FDA's move, relative to management's. "We believe the adequacy of the current Phase III data is questionable due to the small number of fractures prevented relative to new venous thromboembolic events (blood clots)," he said. He cut his 12-month price target to $5 from $10.
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