Editor

New Phase II data from a combination trial disclosed last week for Telcyta at the American Association for Cancer Research's annual meeting spelled relief for some of Telik Inc.'s investors, but whether the troubled cancer compound - which didn't work as a monotherapy in Phase III studies - can keep going is guesswork.

It's educated guesswork, though, as Telik's CEO Michael Wick pointed out, since the Phase II trials enrolled first-line patients. "That was our goal from the beginning, since 2001," he said. "We followed a rather traditional, of third-line to second to first."

In December, two monotherapy trials with the chemotherapy drug against ovarian and non-small cell lung cancer fizzled. A third study, called ASSIST-3 and designed to test Telcyta with carboplatin, came up with questionable results. ASSIST-3 enrolled 244 patients to compare the Telcyta/carboplatin pairing with liposomal doxorubicin in second-line treatment of platinum-resistant ovarian cancer.

Patients in ASSIST-3 were supposed to get treatment until tumor progression or unacceptable toxicity, but a discrepancy turned up between clinical review of the tumor scans and those done by independent radiology experts. About 25 percent of the patients apparently stopped treatment too early. Ongoing is Telik's ASSIST-5 trial, comparing the drug and doxorubicin to treatment with doxorubicin alone against ovarian tumors - a study that could face changes after ASSIST-3 is fully analyzed.

Meanwhile, the latest Phase II data pitting a Telcyta drug combo against NSCLC gained statistically significant improvements in progression-free survival and overall survival in patients who got Telcyta maintenance therapy as compared with those who didn't.

One hundred and twenty-nine patients with Stage IIIb or Stage IV NSCLC were enrolled and given standard doses of carboplatin and paclitaxel and one of four doses of Telcyta (400, 500, 750 or 1,000 mg/m2) for a planned course of four to six cycles. Those who showed objective responses or stable disease after finishing combo therapy could choose to take maintenance cycles of Telcyta by itself every three weeks until disease progression.

In the intent-to-treat population (129 patients), the overall objective response rate was 34 percent, including one complete response. Fifty-six patients, or 43 percent, had disease stabilization, for an overall disease stabilization rate of 77 percent. Median progression-free survival totaled 4.9 months, with an overall median survival of 9.6 months.

One hundred patients, or 77 percent of those enrolled, had objective responses or stable disease at the completion of combo therapy. Half of these got Telcyta maintenance therapy, and the median progression-free survival for them was 6.9 months, compared with 4.2 months for the others (p< 0.0001, HR 0.36). Overall median survival for Telcyta patients was 14.2 months compared with 8.4 months without Telcyta maintenance (p= 0.0003, HR 0.40).

The combo was generally well tolerated at all Telcyta doses, with toxicities similar to those expected with each drug alone. Maintenance therapy was well tolerated, too, with Grade 1 or Grade 2 toxicities observed in less than 5 percent of patients. "We did learn that from Phase III trials - it was extremely safe," Wick said, and Phase II studies backed up the finding, which is particularly important in the older population likely to get the drug.

To make cancer, in effect, a chronic disease "has been a goal of oncology and lung cancer for the last 10 or 15 years," Wick said. But carboplatin and paclitaxel become toxic after four to six cycles, and nothing had been found to take the patients beyond that course.

Telcyta is the first in a new class of cancer cell-activated chemo drugs designed to exploit the overexpression of glutathione S-transferase P1-1, found in many cancer cells. High levels are associated with a poor prognosis and resistance to some chemo treatments.

Telik shares Tuesday rose about 9 percent on the Phase II news, reaching $6.43, still a far cry from the $15-plus price enjoyed by the company before the Phase III failures sheared away 70 percent of the stock's value.

"We're evaluating [next steps with Telcyta] that right now," Wick said. "We know the design of the Phase III study would exactly mimic the Phase II study we reported." More details will be disclosed "around the time of ASCO," he said. The American Society of Clinical Oncology meeting takes place at the start of June in Chicago.

In mid-February, Telik let go about 25 percent of its workforce, leaving the firm with 125 employees, to tighten the focus not only on Telcyta but on Telintra - a candidate for myelodysplastic syndrome that has been rather overlooked by investors, many of whom regard the company as a "one-product" stock. The small molecule is designed to enhance the production of granulocyte-colony stimulating factor and granulocyte-macrophage colony-stimulating factor.

MDS is a tough competitive space, with the likes of Pharmion Corp.'s Vidaza (azacytabine) and Dacogen (decitabine) from SuperGen Inc., and Revlimid (lenalidomide) from Celgene Corp. (MGI Pharma Inc. owns rights to Dacogen in the U.S., Canada and Mexico). Vidaza remains strong, though Dacogen is moving up; full-year 2006 Dacogen sales hit $40 million, beating even management's optimistic projections of $25 million.

At the start of the year, prescription data from December showed Dacogen had taken 44 percent of the market for MDS, as compared to 39 percent the previous month. Sales seemed to have cooled at the end of the year, but the blip probably was due to the holidays, when patients tend to skip their three-day to five-day treatments.

Use of Dacogen could accelerate, too, on the basis of such news as January's word from MGI that its Phase II study evaluating three low-dose regimens of Dacogen showed a 73 percent objective response rate. The data included a 34 percent complete response rate, a 1 percent partial response rate, a 24 percent marrow complete response rate with or without other hematologic improvement responses, and a 14 percent hematologic improvement rate. The results were published in the journal Blood, and MGI plans to include them as part of a supplemental new drug application for Dacogen.

MGI reported first-quarter 2007 earnings last week, and Dacogen sales totaled $23.1 million for the period, which was the drug's third full quarter of sales. The number represents a 22 percent jump in growth over the fourth quarter of last year.

Given all that, it's no surprise that Telik observers discount or ignore Telintra. But the intravenous form has completed Phase II trials in MDS, and an oral form has started development. Phase III trials in MDS are due in the first quarter of next year. A Phase II trial also is expected to begin in the second half of this year with oral Telintra against chemo-induced cytopenia (CIC).

In February - well ahead of the favorable Phase II data with Telcyta - Lazard Capital Markets found that Telik's value "rests largely on Telintra, for which results from large randomized trials have not been reported." The firm had a "hold" rating on Telik shares.

"Our focus has been on Telcyta for the last year or two," Wick said, but Telintra looks promising, especially since it could work in patients who've failed other therapies, and could be administered orally. "The plan would be simply to reproduce the data we have in our Phase II [intravenous] study with the oral version, and then proceed to Phase III," he said.