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UPDATE - Ergomed and partner receive safety green light for new cancer drug

Published: 22:18 29 Apr 2015 AEST

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--updates share price, adds broker comment--

Ergomed (LON:ERGO) said its co-development partner Aeterna Zentaris have received an important sign off for a potentially breakthrough drug for endometrial cancer.

It has been given what’s called a positive recommendation from US regulators that will allow it to push on with final trials.

The green light from the Data Safety Monitoring Board allows researchers to focus on concluding patient recruitment for the phase III clinical study, which is reported to be ahead of schedule.

Endometrial cancer, or cancer of the womb, is the most common gynecologic malignancy in developed countries and occurs when abnormal cells amass to form a tumor in the lining of the uterus. There will be 50,000 new cases in the US alone.

Aeterna and Ergomed will treat woman with zoptarelin doxorubicin, a hybrid molecule composed of a synthetic peptide carrier and the well-known chemotherapy agent, doxorubicin.

A total of 465 patients out of an expected total of 500 have been recruited.

The phase III trial will be split into two groups – one receiving zoptarelin doxorubicin the other doxorubicin on its own.  

“We believe that zoptarelin doxorubicin has the potential to provide a much needed new treatment option to women with late-stage endometrial cancer, and look forward to progressing this study with Aeterna Zentaris," said Ergomed chief executive Miroslav Reljanovic.

“The approval is important from an ethical and safety angle,” adds Neil Clark, Ergomed’s chief financial officer. “It’s a good indication that patients will be safe.”

“For Ergomed, it’s exciting to be working with a Nasdaq-listed partner on a late stage phase III programme where the data is due next year."

Max Herrmann, analyst at Stifel, forecasts US$165mln of zoptarelin doxorubincin sales by 2022, with launch expected in 2017. 

“This news once again highlights the value of Ergomed's co-development pipeline which, in our opinion, is not adequately reflected in the current valuation of the company,” he said. 

The broker has a ‘buy’ rating and 281p target price on Ergomed shares.

Shares currently trade 2% higher at 170p. 



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