Matrix Pharmaceuticals Inc.'s stock fell 31 percent Wednesday afteranalysts informed investors the company's interim look at a trial ofAccuSite Injectable Gel for basal cell cancer didn't support continueddevelopment for that indication.
Matrix (NASDAQ:MATX) fell $3.50 per share to close Wednesdayat $7.88. The company hadn't put out a news release on theinformation as of the market close but did later Wednesday.
AccuSite is a sustained-release package consisting of a biodegradableprotein matrix, 5-fluorouracil (5-FU) and the vasoconstrictorepinephrine. Matrix, of Fremont, Calif., in May 1996 reported theproduct failed to achieve statistical significance in a "contribution ofcomponents" trial that pitted the drug against combinations of itscomponents. That was done to ensure each ingredient contributes tothe performance of the drug. (See BioWorld Today, May 29, 1996, p.1.)
Recently Matrix completed enrollment in a 550-patient studyassessing five-year recurrence of basal cell cancer. An interimanalysis 90 days after treatment showed a response rate of 75 percent,good for cancer drugs in general but not for that indication, wheresurgery can achieve response rates of 85 percent or better.
James Glynn, senior vice president, chief financial officer at Matrix,told BioWorld Today AccuSite development for basal cell cancer "ison hold. We'll continue to see if there is anything we can do with it,but if we don't have better than a 75 percent response rate we don'tthink we can compete in the marketplace."
Earlier data from smaller studies produced better results. And Glynnsaid the contribution of components trials could have been fixed byincreasing the study size.
Glynn said Matrix spoke with some analysts Tuesday so they couldupdate their models before company officials met with investors nextweek. David Stone, a managing director in Cowen & Co.'s Bostonoffice, and a few other analysts put out the information Wednesday.
Stone downgraded the stock from strong buy to buy Wednesday.Still, he said, Wednesday's drop was extreme, lowering the companyto only $1.50 per share over its cash value. Matrix, which raisedabout $132 million since July 1995 in two public offerings and aprivate placement, had about $129 million in cash on June 30, 1996.The company has 21 million shares outstanding.
"The news is not that AccuSite is inactive," Stone said. "It showed a75 percent response rate, but that is not good enough [in thisindication]. The big upside is in the treatment of solid tumors, wheresurgery is not an alternative."
The strategy for AccuSite was to get approval for treating genitalwarts and basal cell cancer. By then published data in otherindications, such as squamous cell carcinoma and psoriasis, wouldlead physicians to develop the best treatment protocols off-label.
Glynn said the failure in basal cell cancer now forces Matrix toreview its plan and decide whether to seek registration in a differentindication.
The product already is approved in the U.K. for genital warts andMatrix is awaiting approval in the U.S. for that indication.
The product for solid tumors, IntraDose, is similar to AccuSite exceptcisplatin is used instead of 5-FU. Glynn said a Phase III trial in headand neck cancers and accessible tumors should be fully enrolled nextyear. Phase II trials of IntraDose in liver cancer will be started in thefourth quarter of this year, he said.
"We have a strong preclinical program," Glynn said. "We anticipatefiling an [investigational new drug application] next year andprobably one every year for the next three or four years." Thoseproducts also are drug delivery packages for oncology.
Stone expects approval of AccuSite for genital warts in the first halfof next year, but said the news in basal cell will lengthen the timenecessary for Matrix to establish a dermatology business. He said thestock should recover to about $20 per share in the next 12 to 18months. n
-- Jim Shrine
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