NeoPharm Inc.'s shares sank Monday following news that its lead glioblastoma multiforme product, cintredekin besudotox (IL13-PE38QQR), failed to meet the primary endpoint in a pivotal trial.

The Waukegan, Ill.-based company lost three-quarters of its value when the stock (NASDAQ:NEOL) plummeted 67.9 percent, or $4.56, to end the day at $2.16.

"I think this drug is, for all intents and purposes, dead," said analyst Christopher Raymond, of Chicago-based Robert Baird & Co.

NeoPharm officials could not be reached for comment before a conference call held late in the day Monday. In a press release, the company's president and CEO, Guillermo Herrera, confirmed that top-line data indicated that cintredekin besudotox was comparable, but not statistically superior to Gliadel. He said the company would work with the FDA to determine the best path forward.

The pivotal trial, called PRECISE (Phase III Randomized Evaluation of Convection Enhanced Delivery of IL13-PE38QQR with Survival Endpoint) began in the first quarter of 2004. It was designed to enroll 300 patients with recurrent glioblastoma multiforme, a disease for which between 8,000 and 10,000 people in the U.S. are diagnosed each year.

Top-line results showed the treatment did not meet the efficacy endpoint at 215 deaths, which was a statistically significant difference in the overall survival curves vs. Gliadel Wafer, developed by Baltimore-based Guilford Pharmaceuticals Inc.

A few months ago, Raymond had downgraded NeoPharm's stock because he thought it had run up too far and he "didn't think they were doing a bang-up job getting ready for the launch," he told BioWorld Today. "I did not expect that this would not work."

He reiterated his neutral rating Monday.

NeoPharm said that the median survival with cintredekin besudotox was 36.4 weeks, compared to the median survival with Gliadel of 35.3 weeks. Looking back, however, it appeared that cintredekin besudotox had more of an advantage over Gliadel. At six months, it had a 69.4 percent survival rate, compared to Gliadel's 62.4 percent rate. At 12 months, the rates were 35.1 percent and 30.1 percent, respectively; and at 18 months, they were 20 percent and 14.5 percent, respectively. But by 24 months, the two arms evened out, with the cintredekin besudotox arm showing a 14.4 percent survival, compared to Gliadel's 14.5 percent survival rate.

The NeoPharm board and its management have created a task force to evaluate options, but Raymond said he believed the compound is finished and questioned some of the company's choices in the last year.

"They had a chance a while back to upsize the trial, just to give themselves a nice insurance policy, and they didn't take it. A lot of folks looked at that as them being a bit reckless," Raymond said, adding that he thought at the time that it reflected management's "confidence in the data."

Raymond expected the trial to hit 215 deaths sometime in January or February, and for NeoPharm to file for approval a couple months later with a U.S. launch in the second half of 2007. He modeled sales to reach $140 million by 2009.

He was skeptical as to whether the company had anything else in its pipeline worth noting. It has a NeoLipid platform, which includes LEP-ETU, a liposomal formulation of paclitaxel, and LE-SN38, a liposomal formulation of the active metabolite of irinotecan. Both were at the Phase II stage when the company laid off 23 percent of its work force in the spring and decided to reprioritize its resources, essentially focusing mostly on cintredekin besudotox. (See BioWorld Today, May 2, 2006.)

Raymond said he's seen it before, when a company loses its main drug and looks headed for disaster, then "one of their pipeline product matures, and it starts to take on a life as a major value driver and the stock recovers." But, Raymond added, that only happens "if the pipeline is diversified."

NeoPharm holds all rights to cintredekin besudotox, except in Japan, where Tokyo-based Nippon Kayaku Co. Ltd. gained the rights in January 2005. (See BioWorld Today, Jan. 6, 2005.)

As of Sept. 30, NeoPharm had cash and short-term investments on hand of $45.2 million.