The trial, which looked at the overall survival results of 950 patients with hormone-refractory prostate cancer, found there was no difference between the satraplatin arm and the control arm.
It is a blow for the company, which has already had to pull the plug on its New Drug Application in the US at the end of July following a less than glowing recommendation to the US Food and Drug Administration that it hold off on approving the drug until these new results came through.
The application for marketing authorisation in Europe was submitted in June.
The new results will also be submitted as part of the review process but could have the potential to influence the European Medicines Agency's (EMEA) decision.
Despite the new setback, GPC Biotech executives were putting on a brave face - at one point shares for the company dropped 61 per cent - as were executives at Pharmion, which has commercialisation rights for the drug in Europe.
"We are extremely disappointed with the findings .
. .
We are currently discussing with our partners, Pharmion and Yakult, plans for the future development of satraplatin," GPC Biotech chief executive Dr Bernd Seizinger said in a statement.
In a conference call, Seizinger said he was still optimistic about the use of satraplatin as an anti-cancer treatment and believed it was still possible to move forward with the drug in Europe and in the US, though it would be more challenging there.
"This is indeed a very difficult time for GPC Biotech but I want to also say this is not the end of GPC Biotech and we'll look at all the options to move forward," Seizinger said at the conference call.
In a separate conference call, Pharmion president and chief executive Patrick Mahaffy said: "This is very much an uphill battle now as a result of the results yesterday . . .
But I will tell you that we will fight to get this approved."
According to the results of the Phase III trial - the SPARC trial (Satraplatin and Prednisone Against Refractory Cancer) - the median of overall survival for the satraplatin arm was 61.3 weeks compared to 61.4 weeks for the control group, with a hazard ratio of 0.97.
The companies are now conducting pre-specified subset analyses with particular attention being paid to the influence of the use of anticancer drug Taxotere (docetaxel).
Pharmion executives believed the study was complicated by the introduction of the approval of Taxotere in 2004, midway through the SPARC study, and believed it had contributed to the outcome of the trial.
"Taxotere came in halfway through and clearly, if there were an imbalance in use of Taxotere across the arms of the trial that would potentially obscure any survival benefit of Satraplatin . . .
The pre-specified subset analyses around Taxotere use are important and will help to isolate the effects of Satraplatin upon survival," Pharmion chief medical officer Andrew Allen said.
GPC Biotech is now re-evaluating its plans for the development of satraplatin, which is currently being investigated as a treatment for lung cancer and rectal cancer.
Satraplatin is a third generation oral platinum compound.
Other platinum products - cisplatin, carboplatin and oxaliplatin - are available in an intravenous formulation.
GPC Biotech's oral formulation had been considered as having a good chance of approval, especially for the indication of hormone-refractory prostate cancer, when chemotherapy has already failed, as treatment for this is limited.
Despite the good news that satraplatin met the end points in the progression-free survival study, the company has still had to face several setbacks over recent months.
Other than the recent issues with satraplatin, the company saw half-year revenues dropping 35 per cent to €7.5m in its second quarter financials announced in August.
Also in August, GPC Biotech announced plans to cut 15 per cent of its workforce in an attempt to save €10m. Meanwhile, the company is being sued in the United States District Court, purportedly in a class action lawsuit on behalf of all persons who purchased or acquired securities of GPC Biotech between December 5, 2004 and July 24, 2007.
The complaint alleges that GPC Biotech violated US federal securities laws by making false public statements relating to the prospects of satraplatin and thereby artificially inflating the price of GPC Biotech securities.
A spokesman from GPC Biotech was unavailable for comment at time of publishing.