The best-performing stock on the Nasdaq last week was a little biotech company from the Pacific Northwest that few people had heard of before.
The company was OncoGenex Pharmaceuticals, a cancer drug developer based in Vancouver, BC and Bothell, WA, with technology licensed from Carlsbad, CA-based Isis Pharmaceuticals. Before last week, OncoGenex appeared to be heading nowhere fast. Investors gave it a market value that was less than the cash it had in the bank. Then on Dec. 3, it grabbed a lot of attention. That morning, OncoGenex reported on a clinical trial that showed its experimental drug, when added to a chemotherapy combination, helped prostate cancer patients live about 10 months longer than if they got the chemo alone.
The OncoGenex stock chart (NASDAQ: [[ticker:OGXI]]) tells the story of what happened next. Trading volume the day before the news was 3,100 shares. The day of the news: 570,700. The stock’s price has almost tripled since the announcement, climbing to $6.06 at Monday’s close. Since prostate cancer affects more than its share of wealthy, powerful men later in life (think Intel co-founder Andy Grove, financier Michael Milken, and former New York Mayor Rudy Guiliani) anything that works is bound to generate big-time headlines. That explains why OncoGenex CEO Scott Cormack had a whirlwind week of meetings in New York last week with investors eager to learn more about his drug. Prostate cancer is one of the nation’s leading cancer killers, responsible for the deaths of 30,000 men in the U.S. each year, according to the American Cancer Society.
“Suddenly, people are looking at this drug and saying, ‘Wow,'” Cormack said by phone, after he returned home to Vancouver, BC on Friday.
It’s quite a reversal of fortune for a company that was left for dead a few months ago. OncoGenex tried to go public last year, and failed. It got its stock listing in August when it essentially took over what was left in the ashes from Bothell, WA-based Sonus Pharmaceuticals. (Sonus failed to show its reformulated chemo drug was any better than the original, and didn’t have much left other than some cash in the bank, some devastated employees, and a stock ticker.)
To scrape by with enough cash, OncoGenex’s Cormack laid off half its staff when he took over, leaving the company with just 27 employees. By the end of September, it had $17.2 million in cash and investments left as a merged company, enough to run “through 2009.”
That was all before the results from Dec. 3. The randomized study enrolled 82 men whose disease had spread or worsened after getting the usual hormone-deprivation therapy. Patients who took the experimental drug, OGX-011, in combation with docetaxel (a chemo drug marketed at Taxotere) and prednisone (an immune suppressor) had a 27.5 month median survival time, compared with 16.9 months for those on those two treatments alone. The difference between those two groups, if it can be confirmed in a larger trial, is huge. For comparison, docetaxel was approved for prostate cancer based on its ability to prolong lives by just an extra 2.4 months. That product is used for multiple cancers, and generated more than $3 billion in sales last year.
The OGX-011 study was sponsored, conducted, and analyzed not by OncoGenex,
