Medarex Inc. (NASDAQ: MEDX) Saw shares plummet in pre-market trading. Pfizer Inc. (NYSE: PFE) has ended a Phase III clinical trial of tremelimumab in patients with advanced melanoma after a review of interim data showed that the drug was not better than standard chemotherapy. Unfortunately, Medarex was the beneficiary of CP-675,206 (tremelimumab), and it would have received a large stream of royalties had this worked.
While this is obviously bad news, this probably should have been expected after its prior disclosures. The company had previously disclosed that results and hopes seen in early trials had not come to fruition in larger and broader study groups. It’s too bad, too. Metastatic melanoma (skin cancer that spread to other parts of your body) is currently a death sentence.
Shares are down 16% in pre-market activity this morning to $7.80. Its 52-week trading range is $7.70 to $18.23.
Obviously there are concerns over any biotech when a molecule fails to generate results. But we would note that Medarex has a significant candidate pipeline and has many active partnerships with other major drug and biopharma players.
Jon C. Ogg
April 2, 2008
Jon Ogg produces the Special Situation Investing Newsletter and he can be reached at firstname.lastname@example.org; he does not own securities in the companies he covers.