Poniard pays for taking a gamble


Poniard Pharmaceuticals yesterday stared into the abyss of disappointment. Shares in the US company lost three quarters of their value on news that its platinum-based chemotherapy agent picoplatin failed to improve overall survival in patients with lung cancer in a phase III trial, dashing hopes of an imminent and lucrative licensing deal and strewing the path to market with obstacles.

Clearly this was a pivotal event, however, strategic choices made by the company exacerbated the importance of this study; in particular waiting for the data before partnering and, perhaps more importantly, deciding against raising money to provide a cushion should the worse happen. Now the worse has happened, and Poniard could be out of cash in six months; no wonder investors fled as fast as they could.

Best supportive care

The failed study, called Spear, enrolled 401 patients with small cell lung cancer who were refractory to first-line platinum-based therapy, or who progressed within six months of initial treatment. Picoplatin plus best supportive care (BSC) was compared to BSC alone, the primary endpoint was overall survival.

Poniard believes the study failed because more patients on the best supportive care arm received chemotherapy following progression that those on the picoplatin arm. This meant survival was much better in the control arm than expected; picoplatin performed as expected and showed a trend for survival advantage.

Further data in January is now awaited; any sign of progression free survival will be of interest, as will the types of chemotherapy used. The company is talking to the FDA, but it seems unlikely the regulator will accept this study as a basis for approval in a second line setting, despite the need for therapies in this area.

Colorectal cancer represents another shot for the drug and results have been encouraging, but it is only in phase II trials in this indication. Cash would be required for further progress, something the company does not have.

Cash crunch

Poniard ended September with $40m, and is spending about $10m a quarter. The group has a loan of $18m, but the terms of this dictate that its cash position must not drop below this amount.

With a share price of $1.90 today, the group cannot even call on a committed equity arrangement, which demands a stock price of at least $3. Clearly the company was counting on positive results and a snap licensing deal, or possibly even a takeout, to solve its money problems. A significant restructuring will no doubt be announced very soon.

However, this all does not mean that picoplatin is dead; it has shown good promise particularly in overcoming platinum resistance, and has better tolerability than its distant cousins eloxatin and oxaliplatin, for example, so could still warrant further study.

However, if a third party is still interested, Poniard is now going to have to accept their terms, a disappointing scenario. It is unfortunate that this outcome was always a possibility, and investors will rightly be asking why there was no plan b (Event - Poniard approaching pivotal phase III data point, July 13, 2009).

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