* Company to halt drug development for soft tissue sarcoma
* Says will focus on synthetic biology drugs
(Adds CEO comment from conference call, analyst comment)
By Vrinda Manocha
March 26 (Reuters) - Ziopharm Oncology Inc will stop developing its drug to treat soft tissue sarcoma after it failed to improve patients' survival without the cancer worsening, wiping out nearly two-thirds of its market value.
The drug, palifosfamide, was being tested in a late-stage trial as a treatment for metastatic soft tissue sarcoma - a type of cancer of the bone, cartilage, fat or muscles.
"We know that based on progression-free survival, there is no way the drug will get approval anywhere in the world," Chief Executive Jonathan Lewis said.
The company will now evaluate all its palifosfamide programs and convert its late-stage study of the drug in small cell lung cancer to a mid-stage trial, he said.
Ziopharm said it would now focus on its synthetic biology program, which creates DNA-based drugs that enable controlled delivery of genes that produce proteins to treat cancer.
The palifosfamide sarcoma trial involved 447 patients with metastatic soft tissue sarcoma across 150 centers.
The patients received either palifosfamide along with doxirubicin - an approved cancer drug - or doxirubicin alone.
An independent committee recommended that the patients be followed to test the improvement in their overall survival, but the company said it does not expect to continue the follow-up.
Brinson Patrick Securities analyst Vernon Bernardino said the company's decision to stop the drug's development was "drastic" but noted that the company had "burned" a lot of money on the project.
"They obviously need to restructure expenses to meet the needs of what has the best chances of success and they believe more in the synthetic biologic program," Bernardino said.
Ziopharm is testing its lead drug in this program in two mid-stage trials for the treatment of melanoma and breast cancer.
However, Bernardino said he ascribed a very low value to the synthetic biology program and that it accounted for only 3 percent of his share-price target of $7.
The company's shares fell 66 percent to $1.76 in early trading -- their lowest in more than three years.
(Reporting by Esha Dey and Vrinda Manocha in Bangalore; Editing by Maju Samuel)
((esha.dey@thomsonreuters.com)(within U.S. +1 646 223 8780, outside U.S. +91 80 4135 5800)(Reuters Messaging: esha.dey.thomsonreuters.com@reuters.net))
Keywords: ZIOPHARM STUDY/CANCER
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