Frankly, I'm surprised the stock is down even that much. Investors
shouldn't have been giving Onyx and marketing partner Bayer's Nexavar
much hope in treating melanoma (skin cancer). After all, it failed
a previous phase 3 trial for that cancer back in 2006. Melanoma is an
extremely difficult cancer to treat and, given the previous failure, it
would have been a surprise to see the drug working against melanoma
this time in combination with the standard of care, Bristol-Myers Squibb 's (NYSE: BMY) Taxol and Paraplatin.
Nexavar is still approved to treat liver and kidney cancer, so this
failure is just another example of how an oncology drug can work well
for one tumor type and not for another. For example, Pfizer 's (NYSE: PFE) Sutent has been riding this rollercoaster
recently. Within a month the drug was shown to help patients with
pancreatic cancer and then failed to show an effect on breast cancer
patients. Some cancer drugs, like Eli Lilly 's (NYSE:
LLY) Gemzar, are able to work on several different types of cancer and
rake in billions in sales a year ($1.7 billion for Gemzar last year).
But investors won't really know how much of a blockbuster up-and-coming
drugs like Sutent, Nexavar, or Novartis ' (NYSE: NVS) Afinitor can be until the companies actually run the trials on additional cancer types.
Onyx certainly isn't giving up hope. Nexavar is still in trials for
breast, ovarian, and lung cancer -- three large markets -- and Onyx
plans to start a phase 3 thyroid cancer trial this year. The next big
results this year for Onyx will probably be from one or both of two
breast cancer trials which are already fully enrolled.
Binary events like clinical trials are what make investing in biotechs so lucrative.
But it's important to know the history of the drugs and the expected
implications of the clinical trials so that you don't "sell the news"
on a headline that sounds bad, but was far from unexpected.
More Foolishness:
pensions!What swine flu means for your portfolio.Dividend cut? Don't panic!
Drugs vis vitamin D
WHen you talk about these drugs 'working' the actual results on all of them are pretty poor. Everyone should know about vitamin D. take a look at www.vitaminD3world.com for some good summaries of the data, and sign up for their free newsletter
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