Tivantinib Will Not Meet Primary Endpoint; Phase III Trial Discontinued

Shares of ArQule (NASDAQ:ARQL) are being crushed in early trading on Tuesday following an announcement that the company and partner Daiichi Sankyo (OTC:DSNKY) will be discontinuing a Phase III non small-cell lung cancer (NSCLC) study of its lead product tivantinib. After a planned interim analysis of the MARQUEE trial, an independent safety monitoring committee advised that the drug would not meet its primary endpoint of improved overall survival in the 1,000 patient study, and the study should be discontinued. Tuesday’s press release stated that the companies will continue to develop tivantinib for other oncology indications.

Most frustrating for ArQule shareholders is that their greatest fear, safety issues, were not the cause of the discontinuation, but rather efficacy. In August, enrollment for a separate, Asia-based Phase III trial (titled ATTENTION) of tivantinib for the same indication was suspended due to safety issues. A data safety monitoring committee raised concerns when the trial showed higher rates of interstitial lung disease (ILD). Analysts maintained that the concerns were unlikely to affect the drug and pointed to the domestic trial as the real determinant. At the time, PropThink advised against involvement in ARQL until safety issues were resolved.

The MARQUEE trial pitted tivantinib, which is a c-MET inhibitor, plus erlotinib against erlotinib plus placebo in previously-treated NSCLC patients. Marketed by Genentech, a subsidiary of Roche Holdings (OTC:RHHBY), and Astellas Pharma (OTC:ALPMY) as Tarceva in the U.S., erlotinib is a mainline treatment for NSCLC and is a tyrosine kinase inhibitor. Interestingly, MARQUEE’s interim analysis did report a significant improvement in progression-free survival, but that data did not carry into overall survival. Tivantinib’s near-term prospects now fall to a planned Phase III trial for the drug in hepatocellular carcinoma (HCC) and results from a Phase II trial for colorectal cancer, both due by early 2013. Already the drug showed promise in a Phase II trial for HCC, so many are pinning hopes on that indication, as well as the lack of safety issues in Western tivantinib trials. Shares of ARQL are off 55% to $2.20 in the late morning.

Additional disclosure: PropThink is a team of editors, analysts, and writers. Use of PropThink's research is at your own risk. You should do your own research and due diligence before making any investment decision with respect to securities covered herein.You should assume that as of the publication date of any report or letter, PropThink, LLC and persons or entities with whom it has relation ships (collectively referred to as "PropThink") has a position in all stocks (and/or options of the stock) covered herein that is consistent with the position set forth in our research report. Following publication of any report or letter, PropThink intends to continue transacting in the securities covered herein, and we may be long, short, or neutral at any time hereafter regardless of our initial recommendation. To the best of our knowledge and belief, all information contained herein is accurate and reliable, and has been obtained from public sources we believe to be accurate and reliable, and not from company insiders or persons who have a relationship with company insiders. Our full disclaimer is available at this link.