Cash shortfall delays trial of Novacea's AQ4N

US drugmaker Novacea has decided to scale back on its clinical development activities for AQ4N (banoxantrone), an investigational anti-cancer prodrug, including discontinuing a recently-initiated clinical trial in acute lymphoblastic leukemia and delaying the planned study in B-cell lymphoma. The firm, which is evaluating strategic alternatives, says it will continue enrollment in an ongoing Phase Ib/IIa clinical trial of AQ4N in glioblastoma multiforme, which continues to be its priority.

Late last year, Novacea's share price plummeted 65.5% after the the firm stopped a late-stage study of Asentar (DN-101) due to a high patient death rate (Marketletter November 12, 2007). In light of the move, chief executive John Walker said "managing our capital resources, which totaled approximately $110.0 million in cash and receivables at the end of the third quarter of 2007, is a top priority as we seek to maximize the strategic options available to the company. We now project a cash burn rate totaling $17.0 million to $19.0 million in 2008, which should be sufficient to support AQ4N development in GBM and our continued efforts with Schering-Plough surrounding Asentar."