The FDA dealt a significant blow to Telik Inc. late Monday, placing a clinical hold on the company's lead drug Telcyta (canfosfamide HCl, TLK286).

Palo Alto, Calif.-based Telik said in a news release that the FDA initiated the clinical hold after the presentation of data from multiple failed Phase III trials of Telcyta at the American Society of Clinical Oncology annual meeting. Executives from the company declined to comment further, but Wachovia Capital Markets LLC analyst George Farmer said in a research note that the hold "calls into question management's judgment and its ability to responsibly develop Telcyta."

Telik first announced last December that the ASSIST-1, -2 and -3 Phase III trials had not met their primary endpoints. No data were provided at the time, but Telik's shares fell 70 percent on the news. (See BioWorld Today, Dec. 27, 2006.)

Over the weekend, Telik released the details of those trials, sending the stock down another 21 percent on Monday. In the ASSIST-1 trial, which compared Telcyta as a monotherapy to either doxorubicin or topotecan in third-line ovarian cancer, median survival was 8.5 months with Telcyta compared to 13.6 months in the control group (p=0.0001). In the ASSIST-2 trial, which compared Telcyta as a monotherapy to Iressa (gefitinib, AstraZeneca plc) in third-line non-small-cell lung cancer, median survival was 4.6 months in the Telcyta arm and 6.1 months in the control arm. In the ASSIST-3 trial, which compared the combination of Telcyta and carboplatin to doxorubicin alone in second-line ovarian cancer, the primary endpoint of response rate was compromised due to premature discontinuations, but the secondary endpoint of median progression-free survival was 3.5 months for both groups. (See BioWorld Today, June 5, 2006.)

Farmer said he suspects the clinical hold was prompted by the poor survival data in ASSIST-1, which "may be a signal that Telcyta is harmful to patients." However, he pointed out that the negative data "could be explained by the possibility that the controls involved active agents superior to single-agent Telcyta rather than by potential Telcyta toxicity per se."

In ASSIST-1, the most common side effect for both treatment arms was nausea, which was lower in the Telcyta group (31.6 percent) than the control group (55.3 percent).

FDA spokespersons declined to comment specifically on Telcyta due to issues of confidentiality. But according to 21 CFR 312.42, the agency can impose a hold on an ongoing investigational new drug (IND) application for a variety of reasons including insufficient evidence of safety and effectiveness in a serious disease. Concerns leading to the hold may come from data submitted directly to the agency or from open literature.

Since the hold applies to the entire Telcyta IND, no new patients can be enrolled in trials of the drug, and patients being treated in the ongoing Phase III study known as ASSIST-5 as well as in follow-on portions of other trials cannot receive additional treatment until the FDA releases the hold. Telik plans to submit detailed safety and other information to the FDA and schedule a meeting as soon as possible to resolve the issue.

News of the hold sent shares of Telik (NASDAQ:TELK) down 25.5 percent, or $1.17, on Tuesday to close at $3.42. Farmer predicted that the company will face continued negative publicity and significant shareholder backlash until the FDA's review of the data.

Telcyta is a new type of cancer cell-activated chemo drug designed to exploit the overexpression of glutathione S-transferase P1-1 found in many cancer cells. Determining if it works and in what settings has proven challenging, but fortunately it is not Telik's only drug candidate.

The company has a number of preclinical programs based on its TRAP technology and is conducting clinical trials in myelodysplastic syndrome (MDS) with Telintra (TLK199), a small molecule designed to stimulate blood cell production. The intravenous version of Telintra improved all three types of blood cells in a Phase II MDS trial, and an oral formulation also is in clinical development.

Farmer said Telintra "could have saved the company from collapse of the ASSIST trials," but he now questions management's ability to develop it as well.

Telik reported $124 million in cash, cash equivalents and investments March 31 and posted a net loss of $16.3 million for the quarter. The company restructured in February, reducing its headcount by about a quarter.