Oncothyreon (NASDAQ: ONTY) $106M (MarketCap) Back in the Game as Merck KGaA Re-Starts Clinical Trials

Oncothyreon (NASDAQ: ONTY) $106M (MarketCap) Back in the Game as Merck KGaA Re-Starts Clinical Trials

Oncothyreon (NASDAQ: ONTY) is a Seattle-based biotechnology company specializing in the development of innovative therapeutic products for the treatment of cancer. The company's overall goal is to develop and commercialize novel synthetic vaccines and targeted small molecules that have the potential to improve the lives and outcomes of cancer patients. Earlier this year, it partnered with German-based Merck KGaA (MRCG.DE) to run clinical trials on an immune-boosting therapy. These consisted of two lung cancer trials known as Start and Inspire as well as a breast cancer study called Stride. The three trials, all of which involve the BLP25 liposomal vaccine (Stimuvax), consisted of a combined 2,600 patients. On March 23rd, one of the patients developed an unexpected inflammation of the brain, known as encephalitis, forcing all of Merck's 3 pivotal trials on humans to go on hold until researchers could figure out whether it was really safe to continue. Following this news, Oncothyreon shares plummeted 27% that day and have not recovered since.

Today, Oncothyreon can breathe a sigh of relief. The company has announced that its German partner has received FDA clearance to re-start 2 of 3 clinical trials of their experimental cancer vaccine Stimuvax on lung-cancer patients, reviving hopes for a key pipeline drug. The Phase III Stride trial in breast cancer remains suspended. In response to this news, the biotech firm's shares were up 6.9% in Frankfurt before Wall Street opened today. Currently, the company is trading at $4.11, up $0.50 or 13.85%.

Oncothyreon has no marketed products, but it has other cancer drugs in its pipeline besides the BLP25-based immune booster. Its partner, Merck, is primarily responsible for the development of this program, while Oncothyreon, accounting for a large portion of the value investors assign to the company, stands to collect royalties on product sales if the treatment is successful.

"The resumption of the BLP25 liposome vaccine clinical program is very good news for the oncology community and non-small cell lung cancer patients. If the Start and Inspire Phase III trials are successful, BLP25 liposome vaccine could play an important role in the treatment of these currently underserved patients," said Dr. Frances Shepherd, director of the Medical Oncology Princess Margaret Hospital in Toronto, Canada, and an investigator of the Start trial, in an Oncothyreon statement.

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