Rebound and Short Squeeze Overdue for Poniard Pharmaceuticals (Nasdaq: PARD) Print E-mail
By M.E.Garza   
Friday, 22 January 2010 13:35

Colorectal cancer is the third most common form of cancer worldwide. Despite significant progress in its treatment over the past decade, colorectal cancer remains the second-leading cause of malignancy-related death in the United States.

Currently, Oxaliplatin is typically administered with fluorouracil and leucovorin in a combination known as FOLFOX for the treatment of colorectal cancer. Oxaliplatin is marketed by Sanofi-Aventis under the trademark Eloxatin or by Medac GmbH under the trademark Oxaliplatin Medac. There are generic equivalents on the market now, but several big pharmaceutical companies, including Pfizer are looking for a treatment that can replace FOLFOX (5fu/leucovorin + Oxaliplatin) in 1st line Colorectal Cancer.

This type of interest, plus the fact that Poniard Pharmaceuticals' (Nasdaq: PARD) Picoplatin is being developed as "a new generation platinum chemotherapy agent that has an improved safety profile compared to existing platinum-based chemotherapeutics and was designed to overcome platinum resistance" give us reason to believe that Poniard Pharmaceuticals may be due for a strong rebound. In mid-November, Poniard told investors that Picoplatin did not significantly improve survival for lung cancer patients in a late-stage trial. Its shares plunged tumbled 75.9 percent as 37.5 million shares were traded. The stock has never quite gotten off the floor since, even as the company reported positive data on the drug as a treatment for colorectal cancer, most investors have remained skeptical about the public statements in which Poniard said current study data showed that a combination of picoplatin and chemotherapy works about as well as a standard chemotherapy regimen. The company's mid-stage trial has been comparing the effects of the two therapies on survival rates, ability to stop the progress of the disease, and disease control.

The company has been hoping to show that Picoplatin is as effective as a regimen as the current standard of care while causing less nerve damage. They have said that nerve damage for patients who took Picoplatin occurred later in treatment and was less frequent and severe. In addition, an early-stage safety trial shows that picoplatin does not increase the risk of arrhythmia.

In early January, Jerry McMahon, Ph.D., chairman and chief executive officer of Poniard said:  "Our focus in 2010 is to secure a strategic partnership to continue the development of picoplatin as a preferred platinum agent in the treatment of solid tumor malignancies.  We believe that current data from approximately 1,100 patients treated with picoplatin, including data from  Phase 2 trials of picoplatin in colorectal, prostate and ovarian cancers, indicate that picoplatin would be a valuable addition to potential partners with marketed and development stage oncology products. Throughout the first half of this year, we plan to a have discussions with the U.S. Food and Drug Administration regarding a regulatory path forward for picoplatin in small cell lung cancer.  We expect to submit efficacy and safety data from the Phase 3 SPEAR trial for potential presentation at the American Society of Clinical Oncology 2010 Annual Meeting in June."

McMahon had also mentioned that the company might be presenting additional data from the Company's Phase 2 trial evaluating it's effectiveness against metastatic colorectal cancer (CRC). This morning, a representative from the company confirmed to BioMedReports that on Sunday, at the ASCO 2010 Gastrointestinal Cancers Symposium in Orlando, Fla. the company will be presenting that data.

We are told that abstract which will be presented is titled: "FOLPI -vs- modified FOLFOX-6 as a first line therapy for colorectal cancer."

If the data presented shows a statistically significant reduction in neurotoxicities with the use of picoplatin in the FOLPI regimen compared with the use of oxaliplatin in the FOLFOX regimen (p<0.0019) as we expect, then interest in the company could increase significantly not only from investors, but from potential "big pharma" partners.

The data which will be presented comes from a randomized, controlled trial which is being conducted with 101 metastatic CRC patients who have not received prior chemotherapy and is comparing the safety, including the incidence and severity of neuropathy, and efficacy, measured by overall survival, progression-free survival and disease control, of intravenous picoplatin in combination with 5-fluorouracil and leucovorin (the FOLPI regimen) to oxaliplatin given in combination with 5-fluorouracil and leucovorin in the modified FOLFOX-6 regimen.

Picoplatin is a cytotoxic platinum compound which causes apoptosis (cell death) by binding to DNA and interfering with DNA replication and transcription.

In anticipation of this data presentation on Sunday, shares of Poniard have traded up over 20% already this morning. From a technical analysis perspective, there could be more gains from a short squeeze given the fact that the stock has been heavily shorted. If the buying pressure continues, the low float could force the bears to cover and send shares up significantly higher.

See also: Poniard Pharmaceuticals: Oversold, Undervalued, Poised for Short Squeeze at Seeking Alpha.

Disclosure: No Positions

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