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Genta Sinks to Q2 Loss After Sanofi Ends Alliance, Sees Life Left in Genasense as FDA Review Looms

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Genta this week posted a second-quarter net loss compared with a year-ago profit as the company recorded sharply lower revenues after an alliance with Sanofi-Aventis to develop the antisense-based cancer drug Genasense ended last year.
 
The Genasense story isn’t entirely over, however. During a conference call to discuss the financials, Genta’s management provided an update on the drug, which is slated for review by a US Food and Drug Administration advisory panel early next month as a part of a combination therapy for chronic lymphocytic leukemia.
 
Additionally, Genasense is still set to be reviewed by European regulators as a treatment for malignant melanoma.
 
In the second quarter, Genta posted a net loss of $14.6 million, or $0.11 per share, compared with a net profit of $1.9 million, or $0.02 per share, in the same period a year earlier.
 
According to the company, last year’s profitability reflects the company’s Genasense deal with Sanofi-Aventis, which was terminated by the French drugs giant in May 2005, one year after an FDA advisory panel recommended against approving the drug in combination with dacarbazine for advanced melanoma.
 
A few months after the advisory panel’s recommendation, Genta also announced that Genasense failed to meet the primary endpoint in a phase III trial for advanced multiple myeloma.
 
Genta’s second-quarter revenues dropped to $400,000 from $7.9 million, again reflecting the loss of license fees and development funding from Sanofi-Aventis. Expenses in the quarter, meantime, rose to $15.4 from $10.2 million the year before as the company ramped up its manufacturing and expanded its sales team in anticipation of a positive review of Genasense for CLL.
 
As of June 30, Genta had cash, cash equivalents, and marketable securities totaling $35.8 million, with no long-term debt and $300,000 in short-term debt. The company said that, based on its currently monthly burn of about $3.8 million and taking into account an increase in expenditures in advance of a possible market launch of Genasense, it has enough funds to operate into the first quarter of 2007.
 
Rebuilding
 
Genasense is designed to inhibit the production of Bcl-2, a protein expressed in a number of cancers and believed to play a role in apoptosis. In 2002, Genta and Aventis (which later merged with Sanofi-Synthelabo) agreed to jointly develop and market the drug as part of a deal potentially worth up to $480 million to Genta.
 
However, that deal ran aground after Genasense failed to hit its mark in phase III testing and an FDA advisory panel recommended against approving the drug in its key indication, melanoma.
 
In the time since Sanofi-Aventis withdrew from the collaboration, Genta has continued to move forward with Genasense, filing the drug with the European Medicines Agency for advanced melanoma about a year ago and advancing clinical studies of the drug in other cancers, including CLL.
 
Now the company is preparing once again to put Genasense in front of the FDA’s Oncology Drug Advisory Committee, this time as a treatment for relapsed or refractory CLL in combination with fludarabine and cyclophosphamide.
 

“Rituximab is not approved anywhere in the world for [CLL],” although it is widely used off-label in the US for this indication. “So securing FDA’s agreement [that it could be used in the CLL trial] going in … was a core issue.”

During a conference call to discuss Genta’s second-quarter financial results, Chairman and CEO Raymond Warrell said that the company has submitted the required briefing document to the FDA and is scheduled to go before the ODAC on Sept. 6.
 
He also noted that the company’s CLL NDA was submitted for accelerated approval, “which implies a commitment to conduct a [post-approval] confirmatory trial that documents clinical benefit.”
 
Warrell said that the proposed protocol for that trial has been reviewed by the FDA, and that the company expects to begin the study before its upcoming meeting with the ODAC.
 
“That assessment was recently completed … and we reached an agreement with [the] FDA on major issues,” he said, including the use of Genasense in combination with Genentech’s non-Hodgkin’s lymphoma and rheumatoid arthritis drug Rituxan, known generically as rituximab.
 
“Rituximab is not approved anywhere in the world for [CLL],” although it is widely used off-label in the US for this indication, he noted. “So securing FDA’s agreement going in … was a core issue.”
 
Another key issue for Genta was running the confirmatory trial in previously untreated patients, “which is a population different from the target NDA population,” so that if the trial data are positive the company can expand the Genasense label to include this additional patient population, Warrell said.
 
In the EU, Warrell said that Genta has “been in close contact with … reviewers over the past several months” and has completed a draft of proposed responses to questions raised by the agency over the company’s Genasense filing in melanoma. The draft is set for review by company advisors, he said, and “we expect to file it during the current quarter.”
 
As for when an EMEA decision may be handed down, Warrell said that “review times in Europe are not as predictable as the US, but we currently believe that an opinion from the European review committee … on the melanoma application … is likely to be received in [the fourth quarter] this year.”
 
If the review committee’s opinion is favorable, the drug would go “to the EMEA for review and formal approval.” Should approval be granted, “the earliest projected sale in Europe … is most likely [late in the first quarter or early in the second quarter] of next year — in line with expectations,” he said.
 
With regards to other oncology indications for Genasense, Warrell said that the company is scheduled to complete patient enrollment in a phase III trial of Genasense plus front-line chemotherapy in acute myeloid leukemia before the end of 2006.
 
“We expect to see definitive data regarding complete remission rates in 2007,” he said. “If positive, we believe that trial can serve as a basis for global registration in AML.”
 
He also said that Genta remains committed to Genasense for melanoma despite the setback in the US, and is “developing ideas for more patient-friendly regimens that will maximize efficacy … with considerably less toxicity compared with other widely used multi-drug regimens.”
 
Warrell mentioned during the conference call that, looking beyond Genasense, Genta anticipates “further progress with our pipeline of DNA medicines and small molecules.” He did not, however, make any mention of the company’s RNAi drugs programs, which it acquired through its $30-million purchase of Salus Therapeutics in August 2003 (see RNAi News, 8/22/2003).
 
Since that acquisition, Genta has made little mention of RNAi, though the gene-silencing technology is still listed on the company’s website as one of its “technology platforms.”
 
A company spokesman told RNAi News that Genta officials are not available for comment before the ODAC meeting.

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