In Wednesday’s article in the Washington Post (GenVec discontinues trials of experimental cancer drug; stock plunges) Mike Musgrove reported that GenVec will discontinue clinical trials of a drug, TNFerade, that was being developed with the aim of fighting pancreatic cancer. Phase 3 testing of the company’s experimental drug would be discontinued because early results showed it was not likely to meet the target for regulatory approval. The news had a devastating effect on GenVec’s share prices. After closing at $2.81 on Monday, the stock opened at 73 cents on Tuesday morning and closed at 80 cents.
The drug joins a list of genetic experimental treatments in recent years that have failed in phase 3 clinical trials and caused their sponsor companies to collapse. The most recent set back adds to the previous bad news from relatively large (for biotech) publicly traded companies such as Avigen (Biotech Firm to Liquidate Under Investor’s Pressure), Introgen Therapeutics Inc (Introgen Therapeutics’ Houston unit gets new life), Targeted Genetics (Targeted Genetics Survives Brush With Death, Sells Gene Therapy IP to Genzyme for $7M), and Cell Genesys (BioSante, Cell Genesys merge in $38M deals). Most of the smaller, private biotech firms are fighting for their survival stripped of cash by scared investors. Starting a new biotech company is almost impossible in the current climate.
So why did this happen? In my opinion the difficult-to treat target of the therapy, such as cancer or cystic fibrosis, doomed these companies. Also, it looks that in the most cases the companies spending was not adequate to the results achieved in the clinic. The early clinical results were sometimes exaggerated to please investors and therefore instead of discontinuing the product early in the process (at phase 1 or 2 of clinical trials), the clinical development continued further to phase 3 trials where it failed anyway. Hopefully, the most recent good news generating gene therapy company, Genetix Pharmaceuticals (Vote of Confidence for Gene Therapy: $35 Million for Genetix Pharmaceuticals), will avoid these mistakes and successfully develop treatment for Adrenoleukodystrophy (ALD), a deadly genetic neurodegenerative disorder.
So what can be done to help gene therapy find its way to business success? With VCs turning away, one of the best chances to finance a new company now is to find angel investors who will be looking not only for immediate financial success, but will be passionate about the cause. Please contact us if you are one of these investors or you know somebody like this. Perspective entrepreneur should also assemble a team of experts in the field, allowing fast and efficient product development. Biotech Experts can provide necessary technical and organizational help for start-up companies. We will be glad to answer your questions and provide initial consultation free of charge. Please let us know how we can help you to develop new gene therapy product. Your comments will be greatly appreciated.