Shares of EpiCept Corp. doubled in price early Friday after the Tarrytown, N.C.-based company issued a news release revealing a new mechanism of action for brain cancer drug Azixa (MPC-6827).

Yet a nearly identical news release issued three days earlier by partner Myriad Genetics Inc. elicited little enthusiasm from investors.

Myriad presented data at the American Association for Cancer Research (AACR) annual meeting on Tuesday characterizing Azixa as a vascular disrupting agent (VDA).

The drug had been previously shown to induce apoptosis, but the new data showed VDA activity as demonstrated by tumor blood vessel damage in addition to apoptotic activity as demonstrated by tumor cell death. Myriad is conducting two Phase II brain cancer trials with the drug and holds worldwide development and commercialization rights.

Shares of EpiCept (NASDAQ:EPCT) traded up a modest 13 cents Tuesday to close at $2.40. Shares of Myriad (NASDAQ:MYGN) rose 24 cents to close at $36.38.

That appeared to be the end of the story. But when EpiCept reiterated Myriad's data in its own news release on Friday, its shares shot up more than 100 percent to a 52-week high of $4.89. Nearly 26 million shares traded hands - about 200 times the normal volume - before closing at $3.95, up 73.3 percent, or $1.67.

Why the sudden excitement?

Navdeep Jaikaria, analyst with Rodman & Renshaw LLC, pointed to Thursday's $890 million deal between Novartis AG and Antisoma plc for the Phase II cancer drug AS1404, which is also a VDA. In a research note, he said the size of the deal "validates the VDA as a promising class" of cancer drugs and "legitimizes the potential" of Azixa. (See BioWorld Today, April 20, 2007.)

If EpiCept is indeed riding Antisoma's VDA coattails, investors were slow to react. Antisoma's deal was announced late Wednesday, but EpiCept's shares rose only 13 cents on Thursday. Perhaps EpiCept's gentle reminder on Friday helped investors connect the dots. But a similar delay affected shares of VDA developer Oxigene Inc. (NASDAQ:OXGN) which rose only 18 cents on Thursday before picking up 31 cents on Friday to close at $4.66 - and Oxigene did not issue a news release. Other publicly held biotechs with VDA drugs in the pipeline, such as MediciNova Inc. and Bionomics Ltd., did not benefit at all from Antisoma's deal.

What else could be at play? It seems unlikely that investors missed the initial Myriad news release altogether. But even if they did, EpiCept's institutional holders consist primarily of index funds more likely to be stimulated by Russell index reshuffling than mechanism of action data.

Some retail investors drew their own conclusions, filling message boards with rumors of a pending acquisition. EpiCept spokespersons were not available to confirm or deny such rumors, but the company ended 2006 with only $14.1 million in cash. Earlier this month EpiCept said its independent registered public accounting firm expressed substantial doubt about the company's ability to continue as a going concern.

Fortunately, EpiCept stands to get milestone payments, sublicensing income and potential royalties on Azixa from Myriad. EpiCept inherited that deal, worth about $27 million plus any royalties, through its takeover of Maxim Pharmaceuticals Inc. Two additional cancer compounds also came with the deal: Ceplene (histamine dihydrochloride), which is under review by the European Medicines Agency for the Evaluation of Medicinal Products, and EPC2407, another dual vascular disruption agent and apoptosis inducer in Phase I trials. (See BioWorld Today, Dec. 3, 2003, and Sept. 7, 2005.)

In addition to cancer drugs, EpiCept's pipeline consists of the clinical-stage pain drugs EpiCept NP-1, LidoPain SP and LidoPain BP. According to Jaikaria's report, the company is also "reportedly talking to multiple pharmaceutical companies" about its apoptosis screening and anticancer drug discovery platform (ASAP), which generated Azixa, EPC2407 and other preclinical compounds.

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