West Coast Editor

Analysts pelted Telik Inc. officials with questions they couldn't answer yet during a conference call on preliminary failure data from Phase III trials with the cancer drug Telcyta, and Wall Street smacked down the company's stock by 70.7 percent.

Shares (NASDAQ:TELK) ended Tuesday at $4.77, down $11.49.

A 440-patient trial called ASSIST-1 with Telcyta (canfosfamide) tested the compound as compared to control agents liposomal doxorubicin or topotecan in the third-line therapy of platinum-resistant ovarian cancer, and missed the primary endpoint of overall survival.

The second study, ASSIST-2, enrolled 520 patients and evaluated Telcyta as compared to gefitinib in the third-line therapy of advanced non-small-cell lung cancer, and also missed the primary endpoint of overall survival.

Results were skewed in the third study, ASSIST-3, which signed up 244 patients to try Telcyta plus carboplatin compared to liposomal doxorubicin in second-line treatment of platinum-resistant ovarian cancer.

Under ASSIST-3's protocol, patients were supposed to get treatment until tumor progression or unacceptable toxicity, but a discrepancy was noted between clinical review of the tumor scans and those done by independent radiology experts.

About 25 percent of the patients apparently stopped treatment too early.

"The discordance rate is higher than expected, and that's why we're very concerned about it," said Gail Brown, vice president and chief medical officer of Palo Alto, Calif.-based Telik, during the conference call, adding that physicians likely did not stop treatment because patients underwent surgery.

"That has occurred on cancer trials across the board, not only ours but others, but I think in general, in this case, these patients are in the recurrent disease setting and not surgical candidates," she said.

Telcyta is the first in a new class of cancer cell-activated chemotherapeutics designed to exploit the overexpression of glutathione S-transferase P1-1, an enzyme overexpressed in many cancer cells. High levels are associated with a poor prognosis and resistance to certain chemo treatments.

"Various cancers [present] their own problems with reading films," Brown noted, and Telik officials will meet with regulators to decide what's next, and whether changes should be made to the ongoing ASSIST-5 trial. That Phase III study is comparing Telcyta and doxorubicin to treatment with doxorubicin alone against platinum refractory or resistant ovarian cancer. Enrollment of the 244-patient trial started in May.

Mark Monane, analyst with New York-based Needham & Co., had the highest hopes for the ASSIST-3 trial. Regulatory risk associated with the study "is real, but may be overstated," wrote Monane in a research report earlier this month, declaring a "strong buy" rating.

Joel Sendek, analyst with New York-based Lazard Capital Markets, wrote in a report Tuesday that Telcyta is "not active as a monotherapy agent, and future trials will be limited to combination use with chemotherapy."

Brown said during the conference call that, "in general, most drugs work best in combination, because cancers have a lot of clever ways to evade drugs. We've tested a number of combinations [with Telcyta] and performed a number of trials where we've seen good activity in combinations with the other standard drugs, the platinums, taxanes and anthracyclines, so we believe that our opportunity with Telcyta remains with the ongoing development program."

Sendek, though, predicted ASSIST-5 will be altered, and Telik will limit its spending on Telcyta, focusing instead on Telintra, its product for myelodysplastic syndromes. A Phase II oral dosing trial is expected to start next year with the small molecule designed to enhance the production of granulocyte-colony stimulating factor and granulocyte-macrophage colony-stimulating factor.