Questions About New Cancer Drug Trigger Lawsuits
By LAURENCE DARMIENTO
Patrick Soon-Shiong is once again at the firing line.
The public company he controls, American Pharmaceutical Partners Inc., faces a slew of shareholder lawsuits following a $1 billion plus loss in stock market value.
The lawsuits stem from a Sept. 24 press release that touted positive results about the company's closely watched cancer drug Abraxane, but failed to include actual trial data. Soon-Shiong said the company needs more time to analyze the data, which is scheduled for release at a Dec. 5 medical conference.
Questions being raised about the study are cited in the stock dropping from $44 a share to under $26 last week. Wall Street generally has been conflicted about Soon-Shiong, going back to the 1980s when he made claims of major advances in diabetes treatment that failed to pan out. (The doubts are reflected in the company's 61 percent short interest position, down from nearly 90 percent earlier this year prior to a squeeze.)
American Pharmaceutical has at its core a generic drug business that has been posting strong sales, but its rising stock price since a December 2001 IPO at a split-adjusted $13.17 a share has largely been driven on the promise of the cancer drug.
Abraxane is intended to be an improved version of Taxol, the world's largest selling cancer drug. It has a new delivery approach that does not require the use of Cremaphor, a toxic derivative of camphor oil.
The company has also said patients do not have to be pre-treated with steroids, which can have serious side effects. However, investors became nervous when the company's Sept. 24 release hinted that some patients might have been treated with steroids after all. In addition, the study was not conducted using "double-blinding" in which neither patient nor doctor knows which drug is being used.
Soon-Shiong has denounced the lawsuits, which accuse him of making false and misleading statements about Abraxane, as baseless. He previously said the double-blind method was not practical, given that Abraxane is administered in different quantities than Taxol, so doctors would have known which drug was administered anyway. The company also notes that radiologists studying the cancerous tumors were blinded to which drug was used on the patients.
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