Shares in US drugmaker Telik fell through the floor after the company announced that its new cancer drug failed to meet primary goals in three late-stage trials.

The Palo Alto, California-based firm said firstly that Telcyta (canfosfamide) failed to meet its primary goal of overall survival in a Phase III trial, called ASSIST-2, involving 520 patients with non-small cell lung cancer when compared to gefitinib. Secondly, in another Phase III study (ASSIST-1) of 440 patients suffering from platinum-resistant ovarian cancer, Telcyta did not achieve the primary endpoint of improved overall survival when compared to liposomal doxorubicin or topotecan.

The disappointment was compounded with details of a third 244-patient Phase III (ASSIST-3) ovarian cancer study which was designed to demonstrate a statistically significant improvement in overall tumour response of Telcyta combined with carboplatin compared with liposomal doxorubicin. Under the trial protocol, patients were to have received treatment until tumour progression or unacceptable toxicity but Telik noted that "a major discordance was observed between the clinical review of the tumour scans and the independent radiology review."

Approximately 25% of the patients were discontinued prematurely from the study, so the firm said the trial was compromised and "may not be suitable for a regulatory submission." Telik added that it plans to meet with advisors to review the results and "also to determine if any changes should be made to the protocol and/or trial conduct procedures for the ongoing ASSIST-5 trial."

However it appears that investors have given up on the drug and Telik shares fell over 70% on the news. Analysts at Stifel Niclaus issued a note saying that "we see no residual value in Telik's technology beyond Telcyta,'' and lowered its rating to 'sell' from 'buy.'

Also the manner in which the news came to light has been criticised. Reuters reported that Eric Ende of Merrill Lynch wrote that "we believe management's timing of data disclosure raises serious red flags. It is unusual for companies to withhold Phase III data for extended periods, especially negative data as was presented today."