By Kavyanjali Kaushik
(Reuters) - Delcath Systems Inc said its experimental cancer treatment was not effective in patients with colorectal cancer in a mid-stage trial, sending its shares down 12 percent in pre-market trade.
The setback comes a week after the same treatment method showed strong efficacy in treating primary liver cancer patients.
The company is designing a minimally invasive procedure to administer high dose chemotherapy drugs to only the diseased organs or regions of the body -- thereby restricting the harsh effects of chemo drugs on other body organs.
Wedbush Securities analyst Nieren Garten said Delcath, which already has a CE mark in Europe for the perfusion of the liver with melphalan, should not read too much into it.
"I think it would not be surprising that with a heavily pre-treated population of only 16 patients, you don't get a response," Garten said.
Delcath's new drug application of the treatment was based on its other late-stage trial data of melanoma metastases and did not include this extra study, he said.
Delcath said its chemosaturation system, which was using melphalan for the treatment, did not prove to be efficacious as the patients had been heavily pre-treated with numerous other chemotherapies.
Sixteen patients with very late-stage colorectal cancer, which had spread to the liver, were recruited into this arm of the trial.
"We will continue to study the efficacy of our chemosaturation system in this patient population that currently has few treatment options," Chief Executive Eamonn Hobbs said.
Delcath said it would initiate a new mid-stage single-arm study in the second half of 2012.
"I would expect that they get patients who weren't in such dire state and increase the size of the trial," analyst Garten said.
The overall study includes patient with hepatobiliary cancer, metastatic cancer of neuroendocrine, ocular or cutaneous melanoma, and colorectal cancer.
In February, the U.S. Food and Drug Administration refused to accept the marketing application of the system for the treatment of patients with metastatic melanoma in the liver.
The FDA had sought information about manufacturing plant inspection timing, product and sterilization validations and additional safety information.
Delcath said the safety profile of the chemosaturation system was consistent with a previous late-stage melanoma trial.
Colorectal cancer is the fourth most common cancer in men and women in the United States, with more than 150,000 new patients diagnosed each year.
Shares of the New York-based company fell about 12 percent in pre-market trade on Thursday. They closed at $4.14 on Wednesday on Nasdaq.
(Reporting by Kavyanjali Kaushik in Bangalore; Editing by Saumyadeb Chakrabarty and Gopakumar Warrier)