Ebb & Flow

Until last week, Telik's $851.4 million valuation sat near the top of cancer companies with lead compounds in Phase III testing. On Tuesday, however, TELK shed 71% of its valuation when its Telcyta failed in a pair of Phase III trials - one in third-line ovarian cancer and the other in third-line non-small cell lung cancer (NSCLC). Data from a third trial, for second-line ovarian cancer, were compromised.

The hosing was the steepest among biotechs with a Phase III cancer blowup this year, suggesting that the bigger they are, the harder they fall. Other late-stage cancer failures in 2006 included NeoPharm (NEOL), which saw its valuation fall 68% to $60.6 million from $188.6 million on Dec. 11 when the company's cintredekin besudotox failed in a Phase III trial to treat glioblastoma multiforme (GBM). ...