Shares of Point Therapeutics Inc. (NASDAQ:POTP) took a beating on Thursday after the Boston-based company announced that although one Phase III trial of cancer drug talabostat is on track, a second Phase III trial is behind schedule and a Phase II trial will not meet its primary endpoint.

The news sent the stock down 19 cents - 32.4 percent - to close at a 52-week low of 40 cents.

Talabostat is a pan-inhibitor of dipeptidyl peptidase (DPP) enzymes. While selective DPP-4 inhibitors like Januvia (sitagliptin, Merck & Co. Inc.) have been approved for diabetes, talabostat is the only DPP inhibitor in the clinic for cancer. Don Keipert, president and CEO of Point Therapeutics, said the DPP-4 diabetes drugs have not worked in the company's tumor models, but the much broader action of talabostat allows it to inhibit fibroblast activation protein (FAP) to suppress tumor growth while stimulating cytokine and chemokine production to generate an immune response.

The drug is being in studied in two randomized, double-blind, placebo-controlled Phase III trials in the second- and third-line treatment of late-stage non-small-cell lung cancer (NSCLC). One trial, which evaluates talabostat plus Alimta (pemetrexed, Eli Lilly & Co.) versus Alimta plus placebo, is on schedule to complete enrollment in the second quarter and provide results in the fourth quarter. But the second trial, which evaluates talabostat plus Taxotere (docetaxel, Sanofi-Aventis Group) versus Taxotere plus placebo, is behind schedule.

Keipert pointed to changes in the standard of care as a contributing factor to the slow enrollment in the Taxotere trial. Use of Taxotere has decreased as Alimta and Tarceva (erlotinib, Genentech Inc. and OSI Pharmaceuticals Inc.) gain market share in second-line NSCLC treatment. Additionally, the trial's enrollment criteria exclude the significant number of patients receiving first-line Taxotere treatment.

The shifting treatment landscape has prompted Point Therapeutics to take a hard look at the Taxotere trial. "We're considering a lot of options," Keipert said, including restructuring the trial. Yet he emphasized that the Alimta trial is the "bigger value driver," considering that drug's increasing second-line market penetration, which was up to 35 percent as of November.

Beyond the Phase III trials, Point Therapeutics announced Thursday that an open-label Phase II trial of talabostat plus Gemzar (gemcitabine, Eli Lilly) in patients with Stage IV pancreatic cancer will not meet its primary endpoint of increasing six-month survival.

That news comes less than two months after the company reported positive interim data in that trial. In January, Point Therapeutics said 10 of 21 evaluable patients had survived more than six months and three of 31 evaluable patients had a clinical response, including one complete response. Yet a surge in enrollment at the end of the year, boosting the trial population to 51 evaluable patients out of 70 overall, resulted in the conclusion that the trial would miss its primary endpoint. (See BioWorld Today, Jan. 16, 2007.)

Even so, Point Therapeutics plans to continue the trial to its completion around the middle of the year and evaluate the secondary endpoints. Keipert noted the encouraging responder data: four overall clinical responses in a population entirely comprised of Stage IV patients, while the Gemzar registration trial achieved only one response in a population with 71 percent Stage IV patients.

Clinical response data also have been encouraging in previous Phase II trials of talabostat conducted in metastatic melanoma and chronic lymphocytic leukemia. Those programs are now on hold, as is a preclinical DPP program for diabetes. Preclinical studies also have shown that talabostat can enhance the anti-tumor activity of both Tarceva and Avastin (bevacizumab, Genentech), combinations Keipert said he'd like to test in the clinic if funding would allow.

But for now, funding will not allow. Point Therapeutics reported cash and equivalents of $16.1 million as of the end of the third quarter, with a net loss of $7.8 million or 24 cents per share. Although the company raised $4.76 million through the sale of 6.52 million shares at 73 cents per share in February, it's not enough to complete the Phase III Alimta trial.

"Our biggest issue is that we need additional capital to finish the Phase III program," Keipert said. He added that although he's had discussions with potential partners for talabostat, the interested parties want to see the randomized Phase III data. Many investors feel the same way, especially given that DPP is a novel and unvalidated target in oncology.

"But with positive Phase III data in hand, this drug has the potential to be a blockbuster," Keipert said.