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With partner Bristol-Myers Squibb Co., Medarex Inc. plans to pursue a biologics license application next year for the melanoma drug ipilimumab, despite missed primary endpoints in three pivotal trials, including one conducted under a special protocol assessment with the FDA.

Medarex's shares (NASDAQ:MEDX) sank 21 percent on news of the failures, closing Tuesday at $10.56, down $2.79. New York-based BMS's stock (NYSE:BMY) ended the day at $28.70, down 61 cents.

The ipilimumab registration program comprises three trials, known as 008, 022 and 007. Results from 008, performed under the SPA, was intended to rule out a best objective response rate lower than 10 percent.

"This 10 percent lower limit of the confidence interval is what the FDA told us the [Oncology Drugs Advisory Committee] would like to see in terms of response rate in uncontrolled trials, and we didn't hit that endpoint in study 008," said Geoffrey Nichol, senior vice president of product development for Princeton, N.J.-based Medarex, during a conference call. "But in our discussions with the agency, the totality of the data has always been an important consideration."

Study 008 is a 155-patient monotherapy trial testing 10 mg/kg of ipilimumab in advanced melanoma patients whose disease progressed after standard treatment. Medarex officials declined to provide answers to some questions during the conference call, because of their plan to present full data from the trials at the American Society of Clinical Oncology meeting next year.

Brian Rye, analyst with Janney Montgomery Scott LLC, wrote in a research report Tuesday that "investor uncertainty about the data and the potential approvability of this dataset has only intensified as a result of the press release and this morning's call."

Nichol, however, sought to provide hope during the call, and pointed to a long duration of response with ipilimumab, which regulators might find pleasing. Interleukin-2 also provides a low response with longer duration, he acknowledged, and could not speculate on what length the FDA might want.

"We already have a bunch of responses in the pre-pivotal program - partial and complete responses that are going on, in the longest cases, for years," he said. "We hope to confirm that with further follow-up of the pivotal program."

Nichol also cited a dose-response effect in study 022, which "underpins a greater sense of certainty that the drug itself is being active and causing these responses."

Analyst Mark Monane of Needham & Co. wrote in a report Tuesday that he is not optimistic about a favorable outcome of talks with FDA regarding ipilimumab as a monotherapy in second-line melanoma.

Jefferies & Co. predicted the latest failure, and views approval as unlikely, based on the data as they are known so far. "Even if the 10 percent mark had been surpassed, our experts viewed that response rates for Phase II single-arm studies with only one-year follow-up would not be sufficient to warrant FDA approval," which more likely would call for two or three years of follow-up, wrote Jefferies analyst Eun Yang in a research report Tuesday.

Experts consulted by Jefferies held a brighter outlook for ipilimumab in Phase III trials for front-line melanoma, and proved sanguine about the possibilities for the drug's class.

Ipilimumab is a fully human antibody that binds to cytotoxic T lymphocyte-associated antigen 4 (CTLA-4), a molecule on T cells that plays a critical role in regulating natural immune responses. Medarex got $50 million up front in the deal with BMS, and could earn up to $480 million in regulatory and sales milestones. (See BioWorld Today, Nov. 9, 2004.)

Medarex/BMS are not alone in targeting CTLA-4 for melanoma, long a formidable indication. New York-based Pfizer Inc. has tremelimumab in Phase III trials, and Medarex stands to get royalties through a technology licensing deal. (See BioWorld Today, Sept. 21, 2004.)

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