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At 'Threshold,' Ziopharm's Bid in Sarcoma Fails; Refocus Due

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By Randy Osborne
Staff Writer

Ziopharm Oncology Inc.'s Phase III trial with the alkylating agent palifosfamide for first-line, metastatic soft tissue sarcoma failed to meet the primary endpoint of progression-free survival (PFS), but the company – shifting its efforts to synthetic biology programs partnered with Intrexon Corp. – will continue to follow patients' overall survival (OS) rates.

"Based on PFS, we know that there is no way this drug will get to approval in any country in the world," said Jonathan Lewis, CEO of New York-based Ziopharm in a conference call. The OS rate, whatever it turns out to be, "will not change the outcome in patient care," he added. "What it may do is inform the future development of palifosfamide in sarcoma."

Ziopharm's stock (NASDAQ:ZIOP) closed Tuesday at $1.82, down $3.31, or 64.5 percent, after trading as low as $1.76.

Questioned by an analyst about the wisdom of discontinuing the trial entirely, Lewis said the results to this point dictate the move. "We are very data driven," he said. "There is really no better data, especially with a well-conducted study as this was, than randomized, blinded Phase III data. We really are just following the data in sarcoma very strictly here."

Asked about bone marrow toxicity in the drug arm of the trial, he said that safety turned out "pretty much as expected," with a doubling of the rate of neutropenia from 9 percent to 18 percent, though the rate at which patients discontinued therapy was the same in both arms.

With Intrexon, of Germantown, Md., the lead program is Ad-RTS IL-12, a DNA therapeutic designed to enable controlled delivery of therapeutic interleukin-12 (IL-12). The technology places IL-12 under the control of Intrexon's RheoSwitch Therapeutic System, which turns on and off expression of the therapeutic protein.

Ad-RTS IL-12 is undergoing a pair of Phase II studies, the first for the treatment of advanced melanoma, and the second in combination with palifosfamide for the treatment of nonresectable recurrent or metastatic breast cancer.

The melanoma study, with 12 to 14 patients in Phase I, recently entered Phase II, and the exact number of patients in the latter trial has not been disclosed. Data should be available in the second half of this year. The Phase I experiment will be outlined at a scientific meeting in mid-May, Lewis said. Phase II work in breast cancer began earlier this year. "We expect to see quite a fast ramp-up with that," Lewis said, and the study will finish "probably in the first half of next year, and potentially the interim data [will be available] at the end of this year."

Ziopharm is restructuring as a result of the Phase III fizzle, so that resources can be allocated away from palifosfamide and toward the synthetic biology push, though the company did not yet have specifics that could be made public.

Jason Amello, chief financial officer, reiterated guidance that the company's cash on hand of about $73 million is enough to last to the second half of this year. "We are expecting that that will last significantly longer," he said, given the restructuring in the wake of the latest news about the sarcoma trial, called PICASSO 3.

"Although we planned for it, we didn't expect it," Amello said. Now that the "rather expensive" palifosfamide trial is history, "we have some more finalization to do on the plan, plus we have some restrictions as to what we can say right now due to SEC and accounting requirements," and the moment is "a little too premature to give an exact window of runway" with regard to cash, he said.

Palifosfamide is still in a Phase III trial, called MATISSE, for first-line metastatic small-cell lung cancer.

The good news, wrote Piper Jaffray analyst Charles Duncan in a research report, is that costs for Ziopharm will likely drop. "The bad news is that synthetic biology is not cheap and is mostly unproven," he added, noting that although "the approach may eventually be a promising move forward in cancer treatments, the data [are] still too early to enable us to have enhanced conviction in its likelihood of success."

Duncan also weighed in on whether the blowup of palifosfamide in sarcoma brings implications for South San Francisco-based Threshold Pharmaceuticals Inc.'s TH-302, in a pivotal study for soft-tissue sarcoma, from which interim data may be available by the end of this year.

"While TH-302 and palifosfamide both utilize the same DNA-alkylation mechanism for cellular toxicity, there are significant differences, we believe, due to TH-302's hypoxia-targeting triggering mechanism which may make it more potent and perhaps favor OS vs. PFS," Duncan wrote in a separate report. "We do not believe that palifosfamide's results read through to DNA-alkylators in general and maintain our confidence in the outcome of the studies for TH-302."

Threshold's shares (NASDAQ:THLD) closed Tuesday at $4.93, up 14 cents.