Cyclacel Pharmaceuticals, Inc. (CYCC) plummeted 76% after the company announced the independent Data and Safety Monitoring Board’s (DSMB) findings from its planned interim analysis for futility of a phase III study after 247 events and the final safety review of 470 randomized patients.

The randomized, registration-directed SEAMLESS phase III study is evaluating the use of oral sapacitabine capsules in 70 years or older patients with acute myeloid leukemia (AML) who are unfit for or have refused intensive chemotherapy. In its press release the company stated that it has enrolled 486 patients in the SEAMLESS study. The study is being conducted under the FDA's Special Protocol Assessment program with the primary endpoint being overall survival.

In the SEAMLESS study, the DSMB found that the planned futility boundary has been crossed. Going by the available interim data, the DSMB concluded that it would be unlikely for the study to reach statistically significant improvement in survival.

However, the DSMB recommended that recruited patients stay on treatment and found no safety concerns associated with sapacitabine. The company plans to continue the study until the pre-specified 424 events have been observed, which is expected to occur between second half 2015 and first half 2016.

Based on the final data, if encouraging, the company plans to meet with the regulatory authorities in the U.S. and Europe to discuss submission of marketing application for sapacitabine for AML.

Apart from AML, Cyclacel is developing sapacitabine for other indications including myelodysplastic syndromes (MDS), chronic lymphocytic leukemia and solid tumors. The company is conducting a feasibility assessment for a phase IIb study on the candidate for MDS. Sapacitabine enjoys orphan drug designation in both the U.S. and Europe.

Our Take

We are disappointed with the DSMB’s interim analysis relating to the SEAMLESS study on sapacitabine for the AML indication. We believe that it reduces the probability of the ongoing phase III study meeting its primary endpoint.

Some well-ranked stocks in the health care sector include Sucampo Pharmaceuticals (SCMP), Valeant Pharmaceuticals International, Inc. (VRX) and Actavis (ACT). While Sucampo and Valeant Pharma carry a Zacks Rank #1 (Strong Buy), Actavis holds a Zacks Rank #2 (Buy).

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