A long day for investors in EntreMed

Many have hopes riding on success of cancer drug trials

Patient remains upbeat

May 13, 2000|By Julie Bell and Rona Kobell | Julie Bell and Rona Kobell,SUN STAFF

Mary Sundeen knew there was going to be trouble as soon as she fired up her home computer at 6 a.m. Thursday to check the headlines. There, quoted on a newspaper's Web site, EntreMed Inc.'s chief spokeswoman saw that a government researcher appeared to be knocking the effectiveness of the company's highly touted cancer drug.

Several hours later, EntreMed's stock opened the day in a virtual freefall, touching the lives of far more people than just the shareholders who had purchased it.

An analyst in Los Angeles skipped lunch, scarfing Power Bars between phone calls, to counsel investors. The Rockville-based company's chief executive re-arranged his schedule to appear on a hastily scheduled CNBC segment in Washington. A cancer patient doggedly dialed reporter after reporter, eager to tell the story of a life he thought might be prolonged by a maligned drug now taking the stock ever lower.

Theirs was a single-day tale of Wall Street, providing a snapshot of the many different kinds of investors involved in a public stock. Some have invested money, others intellectual energy. Still others have invested only hope. Nowhere is this mix of emotion and finance more apparent than with EntreMed, a company whose new kinds of bio-engineered cancer drugs have been touted by no less than the discoverer of DNA's structure as sure to "cure cancer.""Our company has had an awful lot of light shined on it, maybe because we are doing things differently," CEO John Holaday reflected yesterday afternoon, as his company's stock crawled back from the depths of Thursday's thrashing to finish up $1.625 a share at $30.50. "Can you imagine a nontoxic drug for cancer?"

8 a.m. Eastern time. EntreMed's stock was at $41.50, awaiting the opening trade on the Nasdaq stock market.

Holaday had just finished his morning exercise routine and tapped into his home computer to look at the morning's headlines. The Boston Globe was reporting that a senior investigator involved in overseeing human testing of the drug Endostatin said he had seen "no major clinical" response in patients.

Holaday knew immediately that he had a problem. Dr. James Pluda, a respected official at the National Cancer Institute, seemed to be implying that Endostatin was not shrinking tumors in people the way it did in mice, threatening to damage the reputations of the company and the drug. EntreMed, which recently had to pull a planned secondary stock offering because of volatility in the stock market, could ill afford more stock-slashing bad news.

It is Pluda's job to review data on the toxicity of drugs given to patients at Endostatin testing sites overseen by the institute in Houston and Wisconsin. But the Phase I clinical trials he is overseeing are designed primarily to test the safety of increasing dosages of the drugs in patients, not to determine whether they are working.

Holaday called Mary Sundeen, his investor and communications director, at home.

Had she seen the story? Yes. The two made plans to talk further at their regular morning meeting of top company executives.

A coast away in Los Angeles, First Security Van Kasper analyst Alan Auerbach picked up his office phone at 5 a.m. A friend from Boston advised him to look at an article in the Globe. The calls from East Coast investors began pouring in, sometimes lighting up all three of Auerbach's lines at once.

Then the media calls began - CNBC, Bloomberg News, Dow Jones.

For Auerbach, it was the beginning of a day that seemed like it wouldn't end."Listen, if this drug works, the upside is going to far outweigh where the stock is right now," he told investors as the stock began to fall. "If it's unsuccessful, you're going to get annihilated."

In Chicago, cancer patient Chuck Killian and his wife, Lori, were already telling the Chicago Tribune of their dismay over Pluda's remarks.

Chuck Killian had been part of the clinical trials to determine Endostatin's safety until Monday, when he was removed from a study group in Wisconsin because a tumor in his liver had grown more than 50 percent. Food and Drug Administration-approved rules for the clinical trial called for anyone who met that description to be removed from the study.

The Killians, however, believed in the drug and wanted Killian back on it. Ever since he began receiving the Endostatin protein intravenously once a day, he had felt better. The lesions in his liver and lungs quit spreading. He had even been playing golf.

9:30 a.m. Eastern time. EntreMed's stock was at $35.25, more than $6 off its close of the previous day.

Holaday and Sundeen huddling with top executives at the company's Rockville headquarters, considering how to respond. No one was panicking: They had been there before.

EntreMed's stock had shot up 330 percent in one day in May 1998, following a New York Times article detailing Endostatin's success in shrinking tumors in mice.

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