Ariad Pharmaceuticals Inc fka ARIA

[piggerpig]

from barclays today:
Our top small cap picks include ARIA, ISIS, CRME and HALO with ARIA having the
nearest term product event with SUCCEED data in 1Q11 and with downside support
from ponatinib in CMLFloor
?? floor at 1x cash level of $1/share
?? ponatinib pivotal program in CML supports an incremental $3.50/share NPV assuming
$400M in sales and 50% likelihood with true floor at $4.50/share
Upside Potential
?? Incremental NPV of $6/share for ridaforolimus in sarcoma would suggest upside
potential to $10.50/share on SUCCEED success
?? Success of both ridaforolimus in SUCCEED and ponatinib in the PACE phase 3 study in
CML could support upside potential to $17.50/share assuming $7/share full NPV for
ponatinib

Event Path to Getting Paid
?? ridaforolimus SUCCEED phase 3 data in Sarcoma – data are expected in early 1Q11after
targeted PFS events were reached in early November. Ridaforolimus has demonstrated a
34% disease control rate identical to that described for Tarceva in NSCLC and with a
maintenance trial design vs placebo we believe that there is a reasonable likelihood of
success. Targeted hazard ratio for PFS of 0.75 is inline with the 0.71 demonstrated for
Tarceva in NSCLC maintenance
?? ponatinib pivotal phase 2 enrolment completion – ARIA has guided to PACE study
enrolment completion by YE11 with response rate data available by mid-2012. Updated
phase 2 data presented at ASH were impressive with relapsed/refractory chronic phase
CML patients demonstrating a 66% rate of major cytogenic response and 53% rate of
complete cytogenic response, with 100% patients with T315I mutation demonstrating a
major cytogenic response and 89% demonstrating a complete cytogenic response.
Responses were durable with 78% of patients maintaining response at 12 months.