MGI Pharma Inc. said it stopped a Phase III trial of irofulven for gemcitabine-refractory pancreatic cancer, thus ending development of the product in that indication, but also said that pivotal Phase III trials of palonosetron achieved the primary endpoint.

MGI Pharma’s stock (NASDAQ:MOGN) dropped 41.8 percent on Wednesday, or $6.16, to close at $8.59.

“We have both exciting and disappointing news,” MGI Pharma President and CEO Chuck Blitzer said in a conference call, during which the company also discussed its first-quarter earnings and the appointment of a president and chief operating officer.

In an independent Data and Safety Monitoring Board review, it was determined that the comparator agent 5-fluorouracil (5-FU) demonstrated “a greater than expected survival benefit,” the company said, compared to irofulven, the company’s first product from a family of anticancer compounds called acylfulvenes.

Blitzer emphasized that Minneapolis-based MGI Pharma would continue with ongoing Phase II trials with irofulven both as a single therapy and in combination therapy for several cancers, including relapsed or refractory non-small-cell lung, platinum-resistant recurrent ovarian and hormone-refractory prostate cancer.

“Irofulven’s unique mechanism of action shows it to have activity against a variety of tumors,” Blitzer said.

In a March research note, analyst Steven Gerber with CIBC World Markets, of New York, stated that MGI Pharma expected to file a new drug application for irofulven in pancreatic cancer in mid-2003, with a planned launch in 2004.

“Clearly it was a disappointment, but it does not necessarily mean the end [for irofulven] in a number of other indications,” Gerber told BioWorld Today, adding that the failure of a single-agent trial does not necessarily mean that irofulven will not have success as a combination therapy. CIBC did not change its “buy” rating on the stock following the news, he said.

MGI Pharma said that irofulven already has shown “profound” antitumor activity when combined with other agents, which prompted it to launch Phase I studies of the drug candidate with other approved agents such as Campostar (irinotecan), Taxotere (docetaxel) and cisplatin.

In March, MGI Pharma announced that it initiated a Phase I trial in combination with cisplatin in patients with advanced solid tumors. However, John McDonald, senior vice president of research and development at MGI, would only say Wednesday, “The trials are ongoing and we will talk about it when appropriate.”

Positive news for the company on Wednesday was the announcement that a preliminary analysis of pivotal Phase III trials for palonosetron, for the prevention of chemotherapy-induced nausea and vomiting (CINV), showed that it met its endpoint of acute complete response, defined as the percentage of patients who did not experience vomiting or receive rescue medication in the first 24 hours after chemotherapy treatment. The trial also demonstrated palonosetron was efficacious up to five days after a single injection, with better results than comparator agents such as B-HT3 antagonists. The company said that CINV is estimated to occur in 85 percent of cancer patients receiving chemotherapy.

“We are very encouraged by palonosetron’s antihermetic activity, which confirms the drug’s long duration of activity as previously indicated in Phase II,” Blitzer said, explaining that its 40-hour half-life contributes to the long effect of the product.

“It means that the company is on track to make the [NDA] filing this fall and launch the product next year,” CIBC’s Gerber said.

MGI said in the conference call that the palonosetron filing is scheduled to occur in the third quarter, but would not reveal the specifics of the trial results until a later date. The trial was randomized, double blinded, conducted at more than 130 centers in the United States and Europe, and involved about 1,800 cancer patients.

CIBC’s Gerber told BioWorld Today that the fact palonosetron outperformed comparator agents is an added benefit from a marketing perspective.

“It gives them a point of differentiation, which they should be able to exploit successfully,” Gerber said.

MGI Pharma is partnered with Helsinn Healthcare SA, of Lugano, Switzerland, in a deal struck in April 2001, giving MGI the exclusive U.S. and Canadian licensing and distribution rights to palonosetron. During the call, Blitzer said that the market for a drug such as palonosetron is about $1 billion.

In other news, the company reported first-quarter earnings that showed its revenues decreased 23 percent to $5.8 million in the first quarter of 2002, down from $7.6 million in 2001’s first quarter.

Chief Financial Officer Bill Brown said the company had $69 million in cash as of March 31, with an anticipated burn rate of $30 million for 2002, reflecting a cut in expenses of about $10 million, primarily due to the now-unnecessary expenses associated with continuing trials and attempting an approval for irofulven in pancreatic cancer.

Separately, MGI Pharma announced that it would promote Lonnie Moulder to president and chief operating officer, upon the board’s approval at its May 14 meeting. Also, Blitzer will be appointed chairman of the board.