CELL GENESYS

Cell Genesys Inc., a 20-year-old South San Francisco biotechnology company,  announced on October 16, 2008 that it is terminating a late-stage clinical trial of its lead product GVAX.

Cell Genesys is taking this step because an independent expert committee concluded that GVAX was unlikely to deliver positive results.

This is the second trial that the company has had to halt recently. The same committee has advised a halt to a related trial testing GVAX because of increased deaths in the GVAX treatment arm.

The halting of the first trial in late August 2008 was a major blow to the company and the stock price of Cell Genesys. On august 27, 2008 the stock price fell $2 to close at 78 cents.

Following the halt of the second clinical trial, the stock price fell an additional 72% to close at 17 cents on October 16, 2008.

Cell Genesys is responding to the latest negative developments by announcing that it is letting go of most of its employees and is considering a sale or merger of the company.

Cell Genesys was  founded in 1988 and was trading above $50 in 2000. However, the initial excitement about cancer vaccine companies as there has been little commercial success so far in the field. The most promising is Dendreon Corp. which makes Provenge, a vaccine for prostate cancer, and is in late stage clinical trials.