Way UP!
ImClone soars as Amgen slides
Colorectal study shows lower survival rate with Vectibix drug
PrintE-mailDisable live quotesRSSDigg itDel.icio.usBy Val Brickates Kennedy, MarketWatch
Last Update: 12:01 PM ET Mar 23, 2007
BOSTON (MarketWatch) -- ImClone Systems Inc.'s shares soared while Amgen Inc. skidded Friday, playing off a key study for Amgen's Vectibix drug that yielded disappointing results.
Vectibix, a treatment for colorectal cancer, competes against ImClone's rival therapy Erbitux.
Shares of ImClone (IMCL : ImClone Systems Inc
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IMCL38.18, +4.30, +12.7%) shot up 12% to $38.10, while Amgen's shares moved down 5% to $57.53 in midday trading.
Late Thursday, Amgen (AMGN : Amgen Inc
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AMGN58.14, -2.33, -3.9%) said that a clinical trial testing Vectibix in combination with a standard chemotherapy regimen and the drug Avastin showed that patients taking Vectibix had a lower survival rate than those who didn't. Amgen sponsored the so-called PACCE trial.
Avastin is a leading biotechnology therapy marketed by Genentech Inc. (DNA : genentech inc com new
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DNA81.97, -3.31, -3.9%) for the treatment of colorectal cancer.
Approved last September, Vectibix has emerged as a key competitor to ImClone's Erbitux, as both are used to treat patients with advanced colorectal cancer who have failed to respond to other treatments.
Both Amgen and ImClone have been seeking to have their drugs approved as first-resort rather than last-resort drugs for colorectal cancer, which would considerably broaden their market opportunities.
Neither Vectibix nor Erbitux is yet approved to be used with Avastin, which is used to treat patients in earlier stages of the disease. Avastin, which is also used to treat other types of cancer, is Genentech's best-selling drug.
Shares of Genentech also slipped, down 3% at $82.32. The company issued an update on its research-and-development pipeline and financial forecast earlier Friday. See full story.
Erbitux's market position shored up
Erbitux, which is ImClone's only marketed product, is also approved to treat head and neck cancer. The drug is co-marketed with Bristol-Myers Squibb Co. (BMY : Bristol-Myers Squibb Company
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BMY27.38, -0.41, -1.5%) , shares of which were up fractionally at $27.85.
Analysts on Friday said that Vectibix's woes should buoy ImClone shares, at least in the short run.
"We expect near-term momentum in ImClone as investors will likely view failure of the PACCE trial as a positive for Erbitux as it removes a near-term overhang on the stock," wrote Bear Stearns analysts in a research note Friday.
At FBR Research, analysts noted that Vectibix's setback could spell greater market opportunity for Erbitux.
"We think this is a positive for ImClone, in that Erbitux may now have less competition in growing into earlier lines (i.e., bigger markets) of colon cancer," FBR Research told clients.
"We feel more confident in Erbitux's abilities to meet or beat sales expectations after last night's news, and positive pancreatic cancer data would put even more of a spotlight on Erbitux's market expansion potential," they added.
Other options envisioned for Vectibix
In a statement Thursday, Amgen management expressed disappointment over the results of the clinical trial, although they still plan to pursue testing of Vectibix with standard chemotherapy drugs for the treatment of earlier-stage colorectal cancer.
"We had hoped that adding Vectibix to the current U.S. standard-of-care for patients newly diagnosed with [metastatic colorectal cancer] would improve outcomes without excessive added toxicity," said Roger Perlmutter, Amgen's executive vice president of research and development.
"Unfortunately, it appears that adding Vectibix to Avastin, when used in combination with oxaliplatin- or irinotecan-based chemotherapy, increased toxicity without improving efficacy," he added.
As a result of the trial, analysts at FBR Research said they were lowering their peak sales estimates for Vectibix to $762 million
