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Celldex shares off on cancer data, analyst comment - UPDATE 2

Fri May 21, 2010 6:53pm EDT
http://www.reuters.com/article/idCNN2115899920100521?rpc=44


* Analysts cite favorable data from brain cancer drug

* Say initial misinterpretation of data sowed confusion

* Keryx, Ziopharm, Celgene gain on cancer drug data

(Rewrites first paragraph, adds analyst, Pfizer comment, closing shares)

By Ransdell Pierson

NEW YORK, May 21 (Reuters) - Celldex Therapeutics Inc (CLDX.O) shares fell 9 percent on Friday after an unfavorable analyst comment based on a misinterpretation of preliminary data from a study of its experimental brain cancer drug.

Other analysts saw the data as positive and in line with expectations and suggested Friday's sell-off was unwarranted and created a buying opportunity for investors.

Several other biotech stocks rose after the American Society of Clinical Oncology (ASCO) released on Thursday evening more than 4,000 abstracts -- or brief summaries -- of data from studies to be presented at the organization's annual scientific meeting next month.

"Celldex shares are going in the wrong direction," said Jonathan Aschoff, an analyst with Brean Murray Carret & Co, who cited "very solid data" from a study of the company's therapeutic vaccine, called CDX-110.

Celldex shares closed 9.2 percent down at $6.97 on Nasdaq and rose to $7.05 in after hours trading. Before the data were released, the stock had nearly doubled for the year to date.

Another analyst said on Thursday evening that interim results from the trial, at first glance, did not measure up to data from earlier studies of the vaccine, which Celldex is testing in partnership with Pfizer Inc (PFE.N).

Celldex shares had initially tumbled 20 percent in after-hours trading on Thursday but quickly bounced back to down about 8 percent after that analyst admitted to misreading the data and called the result encouraging.

"The reality is that there was a misinterpretation of the data that was reported," WBB Securities analyst Steve Brozak said of the sell-off.

He said the real news will come at the ASCO meeting in June, when researchers will have a full explanation of the study data.

Early results from the study of 40 patients with glioblastoma tumors -- a form of brain cancer -- showed that 28, or 70 percent, were alive with no signs of their cancer worsening 5-1/2 months after treatment.

That is about 40 percent longer than seen in patients who received standard care, Celldex said.

Patients in the trial were injected with CDX-110 after initial treatment with Temodar, a Merck & Co Inc (MRK.N) drug that is currently the leading treatment for the most common form of brain cancer.

Celldex said the interim results were "very much the same" as those reported last year from two smaller trials of CDX-110.

It expects to have final trial results, involving 65 patients, later this year.

Pfizer spokesman Curtis Allen said the companies will need to examine full data from the trial before deciding whether to pursue late-stage trials of CDX-110.

"Pfizer and Celldex are evaluating the next step," he said. "We don't want to speculate how long that will be."

The shares of Keryx Biopharmaceuticals Inc (KERX.O) rose 11 percent to $4.98 after data showed its drug, KRX-0401, improved overall survival and slowed cancer progression in patients with advanced colorectal cancer.

The medicine, also known as perifosine, was well tolerated and showed "promising activity" over chemotherapy as a second or third-choice drug for patients with colorectal cancer that has spread.

Investors also cheered the first look at new data from a study of Ziopharm Oncology Inc's (ZIOP.O) drug to treat sarcoma, sending its shares up nearly 10 percent.

A summary of the data showed the Ziopharm drug, palifosfamide, combined with chemotherapy delayed the time it took for sarcoma tumors to grow by 77 percent longer than with chemotherapy alone.

The shares of much larger biotech company Celgene Corp (CELG.O) rose as much as 3 percent after two studies demonstrated the value of its blockbuster multiple myeloma drug, Revlimid, as a maintenance therapy. Shares closed up 0.6 percent at $56.15.

The studies showed Revlimid reduced the risk of disease progression by 50 percent.

Maintenance therapy is seen as a major avenue of revenue growth as it means drugs that had been used only after cancer recurs or worsens may be taken by patients for many months in an effort to hold the disease in check. (Reporting by Ransdell Pierson; additional reporting by Bill Berkrot and Deena Beasley; editing by Tim Dobbyn and Andre Grenon)