Ligand Pharmaceuticals Inc.'s cancer drug Targretin missed its primary endpoints in two pivotal trials evaluating the drug in front-line combination therapy to treat non-small-cell lung cancer.

The label-expansion trials, designed to compare Targretin plus standard chemotherapy to chemotherapy alone, failed to show statistical improvement in the overall survival rates of patients with advanced NSCLC. The product also missed the secondary endpoints in both trials, which were based on Kaplan-Meier projected two-year survival.

Ligand's stock (NASDAQ:LGND) fell $2.35, or 28.6 percent, Monday to close at $5.88.

"We are, of course, very disappointed that we failed to achieve a survival advantage with Targretin in the intent-to-treat population," Andres Negro-Vilar, Ligand's executive vice president of research and development and chief scientific officer, said during a conference call, though the company continues to investigate the product in combination with other chemotherapy regimens.

Both Phase III studies enrolled more than 600 patients who were randomized according to tumor stage - either Stage IIIb with pleural effusion or Stage IV - and gender. In the Spirit I trial, patients received either cisplatin/vinorelbine chemotherapy alone or in combination with Targretin, a selective retinoid X receptor modulator. Patients in the Spirit II trials received either carboplatin/paclitaxel alone or with Targretin. Ligand reported that initial daily doses of Targretin were similar to those given during earlier Phase II studies that had demonstrated survival benefits.

It was not immediately clear why results of the Spirit trials fell short of expectations, said David Robinson, chairman, president and CEO, during the same conference call.

"This is very early on in the data-analysis stage," he said. Ligand is hoping to present further details and data from additional studies during the American Society of Clinical Oncology meeting in Orlando, Fla., in May, hoping, by then, to "know why Targretin works or doesn't work for various patient groups."

The company recently completed a Phase II trial of Targretin in combination with gemcitabine/carboplatin, and has several ongoing Phase I and II trials evaluating Targretin with weekly carboplatin/paclitaxel and in combination with Taxotere as a first- and second-line treatment for NSCLC. The company is conducting three studies in patients with NSCLC who have failed at least two prior treatments, including a trial to evaluate Targretin in combination with South San Francisco-based Genentech Inc.'s Tarceva (erlonitib). Robinson called those trials "exploratory studies," and said the company "expects to gain important information from them to make more focused development decisions."

However, not everyone remained optimistic about Targretin's future in NSCLC. Analysts with Friedman, Billings, Ramsey & Co. in Arlington, Va., stated in a market report that the fact that Targretin trials did not meet even secondary endpoints indicated that researchers had not "learned anything that would spur experimentation with Targretin in front-line lung cancer."

FBR added that Ligand's chances of success in that indication were small to start with, and noted the difficulty of other companies developing a drug that improves survival rates over chemotherapy alone.

One example of that difficulty was reported only a few weeks ago when Seattle-based Cell Therapeutics Inc. saw its stock lose nearly half its value, dropping 47.5 percent, after its cancer drug Xyotax, in combination with carboplatin, missed the primary endpoint in a pivotal trial in NSCLC. But not all the news is bad. Only a week after the Xyotax news, Genentech saw its shares jump 25 percent after data from its Phase III trial showed that adding Avastin to standard chemotherapy resulted in an improved survival rate of 23 percent over chemotherapy alone. (See BioWorld Today, March 8, 2005, and March 16, 2005.)

And, despite assurances from Ligand, FBR analysts were skeptical that additional analysis might confirm a correlation between dose intensity and survival for future trials.

Negro-Vilar said early trends suggested a correlation between Targretin dose intensity and biomarker response and survival, since it appeared that higher doses of the drug produced higher triglyceride levels. Further analysis could indicate that patients who receive higher doses responded best.

"We'll be looking very carefully for information from both trials that can help understand which patients can benefit the most from this treatment," Negro-Vilar said.

Targretin capsules received FDA approval in December 1999 for the treatment of cutaneous T-cell lymphoma in patients who were refractory to at least one prior systemic therapy. The product gained marketing approval from the European Commission in 2001.

In addition to its continued studies of Targretin, Robinson said San Diego-based Ligand also would remain focused on the commercial development of Avinza and Ontak "as principal drivers of the company's growth," while awaiting approval "of near-term corporate-partnered products."

Ligand has four partnered products in Phase III development for NSCLC, osteoporosis and menopausal symptoms.

The company said earlier this month it required an extension for filing its annual report on Form 10-K, and to release fourth-quarter and full-year earnings. Ligand said the audit committee of the board was conducting a review, with the assistance of management, of the company's revenue-recognition policies and accounting for product sales.