BioWorld International Correspondent

Shares in Pharmexa A/S fell 25 percent on the Copenhagen Stock Exchange Monday on news that the company decided to discontinue recruitment onto a Phase II trial of a therapeutic vaccine for metastatic breast cancer.

Its shares (CSE:PHARMX) closed Monday at DKK16.80 (US$2.88), down DKK5.70 from Friday's close. The sell-off continued during trading Tuesday morning. At one point, the stock dipped to DKK14.60 but it had recovered to close at DKK16.40.

The fall was justified, Carsten Lønborg Madsen, analyst at Dankse Equities in Copenhagen, told BioWorld International. "When I removed the compound from my estimates it lowered my fair-value estimate by 27 percent," he said.

The vaccine, a recombinant protein called HER-2 Protein AutoVac (PX 104.1), was designed to break immune tolerance and elicit a polyclonal antibody response to the human epidermal growth factor receptor 2 (HER-2 receptor), which is overexpressed in up to 30 percent of breast cancers. A previous Phase I trial indicated that it was safe to use and that it stimulated an antibody response.

In the Phase II trial, it was being administered to women with Stage IV breast cancer in combination with the adjuvant QS-21. The primary endpoint of the study, which was being conducted in cancer research centers in Russia, Poland and Romania, was the development of an objective tumor response. Progression was not delayed in the first 10 patients evaluated, according to preliminary data, although four out of five patients who received all four scheduled immunizations developed antibodies to the HER-2 receptor at levels expected to be therapeutically relevant.

"Our interpretation is that the vaccine simply did not have enough time to work. What's frustrating about it is we will never know," Jakob Schmidt, CEO of Hørsholm, Denmark-based Pharmexa, told BioWorld International. Patients progressed within six to eight weeks

Fourteen of a planned 40 patients had been recruited into the trial, and those who have not yet received treatment will complete the protocol, which requires a switch to alternative treatments once tumor progression becomes apparent. Further recruitment has been stopped, however.

Administering the vaccine to healthier patients would require a larger and longer trial, which would be difficult for a company of Pharmexa's size to conduct, Schmidt said. "We are now investigating whether there are any possibilities for taking it forward." The company is in discussions with potential licensing partners, he said, but the poor clinical response seen in the present study will make it difficult to secure a deal, despite the promising antibody data. "It would have been easier if we had a few clinical responses, as well," he said.

The negative news should not have an impact on the company's partnered or internal AutoVac programs, Schmidt said. H. Lundbeck A/S, of Copenhagen, has partnered with Pharmexa on the development of a therapeutic vaccine for Alzheimer's disease. "There's not the same kind of time pressure. These patients do not have to mount an immune response within four to six weeks."

Bavarian Nordic A/S, of Kvistg rd, Denmark, is combining the DNA-based version of the vaccine technology with its own MVA vector in order to elicit a combined antibody and T-cell response to breast cancer. A Phase I/II trial is scheduled to begin later this year. Pharmexa's lead internal AutoVac program, which still is at a preclinical stage, is based on developing an antibody response against RANKL, a protein target implicated in bone disease.

Madsen is not factoring any AutoVac-based projects into his model at present. "Currently I'm only assigning value to one other compound in their pipeline," he said. That compound is GV1001, a therapeutic vaccine against pancreatic cancer that has moved into pivotal Phase III studies. (See BioWorld International, May 3, 2006.)

That will not deliver data until 2010, however. The company is seeking permission to move the same product into a Phase II trial in liver cancer, which would report in the final quarter of next year. Although Madsen has assigned a fair-value estimate of DKK24 per share to GV1001, he has downgraded his recommendation on the stock because of the shortage of near-term news flow.