Washington Editor

Shares in SGX Pharmaceuticals Inc. suffered mightily on Tuesday following a Phase II/III study stoppage.

An independent Data and Safety Monitoring Board determined that response rates to Troxatyl were unlikely to prove its benefit as a third-line treatment for patients with acute myelogenous leukemia. The company's stock (NASDAQ:SGXP) plunged 41.1 percent on the news, falling $1.89 to an all-time low of $2.71, since the shares began trading publicly six months ago, when the company sold 4 million common shares at $6 apiece in its $24 million initial public offering. (See BioWorld Today, Feb. 2, 2006.)

Though the recommendation to discontinue the trial was not based on safety concerns, the efficacy failure signaled the end of the road for the drug in this indication. The data were culled from about half of the study's planned 211 enrollees.

"We concluded that with the response rate observed to date, a fully enrolled trial would be most unlikely to support a successful NDA," SGX President and CEO Mike Grey said in a conference call. He called the outcome "disappointing" and "surprising" in light of prior studies.

The study included patients who are in a second relapse, after having a second response that lasted less than six months, or who were refractory to two previous courses of induction chemotherapy. It was designed to demonstrate a meaningful improvement over historical data from the M.D. Anderson Cancer Center database, which documented a complete response rate of 4.7 percent in that patient subgroup, but that did not happen. San Diego-based SGX did not provide specific findings.

There are no approved therapies for treating third-line adult AML patients, "a very difficult-to-treat" population in whom the historical median survival time is about two months, Grey said.

Going forward, he said Troxatyl could have a future in other indications, and decisions on its future would be made by the end of this year. In the past, the company has evaluated the cytidine analogue in various solid tumors, as well as other hematological cancers such as blast-phase chronic myelogenous leukemia and myeloid dysplastic syndrome, and the drug has generated "interesting results," Grey said.

SGX licensed worldwide rights to the compound in July 2004 from Laval, Quebec-based Shire BioChem Inc. It was brought in to provide a near-term commercial opportunity while the rest of the portfolio matures. (See BioWorld Today, July 30, 2004.)

Beyond Troxatyl, earlier-stage efforts at the company are focused on identifying a development candidate later this year in its partnered BCR-ABL inhibitor program for drug-resistant chronic myelogenous leukemia. The collaborative work, being carried out with Novartis AG in Basel, Switzerland, is expected to generate an investigational new drug application in the first half of next year.

It represents SGX's most advanced program developed using its FAST drug discovery platform, which allows for the rapid identification of potent and selective small-molecule compounds for well-validated but challenging targets. Another preclinical program developed out of the FAST platform, which is focused on MET kinase inhibitors for solid tumors, is not partnered.

SGX, which previously was called Structural GenomiX Inc., had $47.7 million in cash reserves as of June 30. Grey declined to revise any spending forecasts, though he noted that its burn rate potentially could slow as a result of halting the Phase II/III trial. He added that no staff cuts are expected as a result of the setback.