CTI BioPharma Corp (NASDAQ:CTIC) delivered crushing news today with the report that its final stage trial for a treatment aimed at the blood cancer non-Hodgkin lymphoma failed to meet its main objectives.
The Phase III trial evaluated the drug, Pixuvri combined with Roche’s rituximab in comparison to gemcitabine combined with rituximab in patients with aggressive B-cell non-Hodgkin lymphoma.
The results found that the use of Pixuvri failed to meet its primary endpoint of an improvement in progression-free survival, according to the company.
“We are disappointed with the outcome of the PIX 306 trial and will proceed to conduct a thorough review of clinical data to assess the next steps for the PIXUVRI program," said Dr Adam Craig, CEO of CTI BioPharma.
Shares in the thinly-traded biopharma group were halted in pre-market trading, but later resumed trading to fall 14% in the morning session to US$4.47.
Given the explosive nature of the announcement, analysts also moved to change their projections for the company.
Oppenheimer’s Leah Rush Cann, for example, reduced CTI’s revenue forecast by 37% for 2020 and by 20.9% in 2021. She also slashed its revenue forecast by 15.8% in 2022; 12.7% in 2023; and 13.9% in 2024. “As a result of PIX306 not meeting its primary endpoint, we are removing Pixuvri from our CTI Biopharma revenue estimated through 2024,” Rush Cann wrote in a note to investors.
"Our 2018 outlook is unchanged for CTI BioPharma, and 2019 is only modestly impacted," she added.
Rush Cann is keeping an Outperform rating on the stock and is only reducing her stock price target to US$6 from US$7.
She maintains a relatively rosy view on CTI BioPharma, which is not yet profitable, as she is bullish on its compound pacritinib, which is used for the treatment of patients with myelofibrosis and set to hit the market by 2020.
The biggest risk to the stock is if pacritinib fails to obtain approval by the US Food and Drug Administration, according to Rush Cann’s analysis. “Under the scenario that [pacritinib] fails to be FDA approved, we estimate CTI BioPharma’s stock could have little value,” she wrote.
The so-called PIX 306 trial enrolled 312 patients who had relapsed cases of non-Hodgkin lymphoma and were ineligible for stem cell transplants.
Non-Hodgkin lymphoma is a cancer that begins in the lymphocytes, a type of white blood cell, and its range of usual treatments include chemotherapy, radiation and stem cell transplants.
-- updated with renewed share price movement as well as analyst commentary