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Kosan Biosciences Inc.'s word that updated results from a Phase Ib trial with tanespimycin showed a lower response rate in multiple myeloma than the company reported earlier knocked a hole in the stock, but the data might not prove anything about the heat shock protein 90 inhibitor's ultimate success in the Phase III program, already under way.

"We believe that we have an active drug here, but we are looking for some insight into why there has been some potential run-down" in the latest results, said Robert Johnson, president and CEO of Hayward, Calif.-based Kosan.

Shares of the company (NASDAQ:KOSN) closed Monday at $3.31, down $2.47, or 42.7 percent, after trading as low as $3.20 in the wake of news from the American Society of Hematology (ASH) meeting.

Tested in combination with bortezomib (Velcade, Millennium Pharmaceuticals Inc.), tanespimycin was given in two forms: Kosan's first version, which contains the solvent Cremophor (polyethoxylated castor oil) and a new suspended injectable. Both showed activity in the Phase Ib trial, which enrolled 71 patients with relapsed, refractory MM.

Dose escalations ranged from 100 mg/m2 to 340 mg/m2 for tanespimycin, and from 0.7 mg/m2 to 1.3 mg/m2 for bortezomib.

Researchers evaluated the tanespimycin's outcome in patients classed as Velcade-naive, Velcade-pretreated and Velcade-refractory, and administered tanespimycin by a one-hour infusion following the bortezomib dose twice weekly every two weeks out of three.

Thirty patients took part in the dose-escalating phase of the study, and the remaining 41 got 340 mg/m2 of tanespimycin and 1.3 mg/m2 of Velcade. Of the latter, 19 were treated with the original Cremophor form of Kosan's compound, and 22 with the newer version. Results showed the response rate at the 340-mg/m2 dose came in lower than the rate in the earlier, dose-escalating group given tanespimycin at amounts between 100 mg/m2 and 275 mg/m2.

Specifically, in the Velcade-naive group, the overall response rate (complete, partial and minor responses) was 47 percent. In the pretreated segment, the percentage was the same, and in the Velcade-refractory group, the rate was 17 percent.

At the American Society of Clinical Oncology meeting earlier this year, Kosan offered interim data from 56 patients in the study, and results from the full patient set suggested a lessened response rate, which could mean adjustments in the Phase III program, known as TIME, though no decision has been made.

Michael King, analyst with Rodman & Renshaw, told BioWorld Today that investors might have overreacted to the Phase Ib news, since patients enrolled since the ASCO meeting - who are more heavily pretreated than those signed up earlier - could be more refractory. Leerink Swann's Howard Liang agreed in a research report, calling the apparent change in response rate "not particularly meaningful."

Johnson told BioWorld Today the possibility of sicker patients enrolled since the interim data will be investigated "along with other factors. It's always difficult with small numbers to know what the ultimate signal is."

A clearer picture of tanespimycin's value likely will emerge later this week at the San Antonio Breast Cancer Symposium, where Kosan will unveil data with the drug when used with trastuzumab (Herceptin, Genentech Inc.) for HER2-positive breast cancer.

Kosan already has disclosed positive results in breast cancer, and expects to expand on that dataset over the weekend, Johnson said. "We hope investors are paying attention to that area as well," he said.

One factor that "got lost" amid concern over the latest results is the finding, through safety data, that tanespimycin apparently can protect against Velcade-induced neurotoxicity. Peripheral neuropathy is the most common dose-limiting side effect of Velcade.

Tanespimycin, also known as KOS-953, combined with Velcade is undergoing a Phase III registration program known as TIME.

The first study to begin, called TIME-2, is enrolling relapsed-refractory MM patients, with data from TIME-2 intended to support results from TIME-1, due to start early next year. Kosan reached agreement with the FDA on the design of TIME-1 in September.

Other studies are trying the drug in combination as a monotherapy against metastatic melanoma. Intravenous and oral forms of Kosan's second-generation Hsp90 inhibitor, alvespimycin (KOS-1022), are being evaluated in Phase I trials in hematologic and solid tumors, along with HER2-positive metastatic breast cancer.

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