Market Overview

Downside Alert: Here's Exactly Why OncoGenex Pharma Is Having An Awful Start To December

Downside Alert: Here's Exactly Why OncoGenex Pharma Is Having An Awful Start To December
Related OGXI
Mid-Afternoon Market Update: Crude Oil Down Over 1.5%; NCR Shares Spike Higher
12 Biggest Mid-Day Gainers For Wednesday

  • Shares of OncoGenex Pharmaceuticals Inc (NASDAQ: OGXI) plunged more than 30 percent on Wednesday.
  • OncoGenex said that its Phase 3 AFFINITY trial with custirsen is continuing following an interim analysis.
  • Stephen Willey of Stifel downgraded shares of OncoGenex to Hold despite shares trading at/below cash.
  • Shares of OncoGenex Pharma plunged more than 30 percent Wednesday morning, following an announcement that its Phase 3 AFFINITY trial with custirsen will continue based on the pre-planned interim futility analysis of the intent-to-treat population.

    Final results of the study are expected in the bottom half of 2016, but are dependent on the timing of the event-driven final analysis.

    Related Link: Time To Buy GW Pharma, Roth Capital Says

    "The overall survival endpoint of the entire AFFINITY trial remains clinically meaningful and its target hazard ratio of 0.75 is attainable with sufficient power to demonstrate a benefit from custirsen for men who are battling advanced prostate cancer," said Scott Cormack, president and CEO of OncoGenex in a press release. "We designed the AFFINITY trial so that the final analysis of the ITT population could stand alone as a Phase 3 submission to regulatory agencies regardless of the outcome of the smaller subgroup."

    Stifel: Move To The Sidelines

    Stephen Willey of Stifel downgraded shares of OncoGenex to Hold from Buy, while removing a prior $7 price target.

    "We believe the OS analysis in the prospectively-defined subgroup of poor-prognostic/chemotherapy-experienced CRPC patients enrolled in the P3 AFFINITY trial (cabazitaxel ± custirsen) represented the best opportunity for custirsen to secure a P3 clinical win," Willey wrote.

    "And while acknowledging the rigorous statistical threshold doesn't rule out the potential for a subsequent win on an intent-to-treat (ITT) basis, we believe prior P3 SYNERGY data (docetaxel ± custirsen, chemotherapy-naïve CRPC) suggests visibility here is minimal."

    Willey continued that AFFINITY "fails to achieve statistical threshold for overall survival (OS) in
    subpopulation of metastatic castrate-resistant prostate cancer (CRPC) patients with poor-prognostic risk factors."

    In addition, the analyst stated, "We believe prior P3 SYNERGY ITT data and the biological rationale supporting clusterin inhibition as a means of overcoming treatment resistance suggests these poor-prognostic AFFINITY patients were the most-appropriate subjects in which to demonstrate a custirsen-mediated treatment benefit."

    Willey also added, "We believe visibility into 1Q16 PFS data from the P2 SPRUCE trial (carboplatin/pemetrexed ± apatorsen, first-line NSCLC) is similarly-limited and apatorsen's safety/tolerability profile still remains a source of longer-term concern for us."

    Bottom line, the analyst stated that it is "difficult" to have any "high degree of confidence" moving forward. As such, investors should move to the sidelines – even if the stock's valuation implies it is trading at or below its cash on hand.

    Image Credit: Public Domain

    Latest Ratings for OGXI

    Dec 2015Stifel NicolausDowngradesBuyHold
    Sep 2015RBC CapitalMaintainsSector Perform
    Apr 2014Stifel NicolausMaintainsBuy

    View More Analyst Ratings for OGXI
    View the Latest Analyst Ratings

    Posted-In: Analyst Color Biotech Long Ideas News Downgrades Health Care Price Target Analyst Ratings Best of Benzinga


    Related Articles (OGXI)

    View Comments and Join the Discussion!