ARIA moving higher:
Barclays increases target to 9
We are reiterating our 1-Overweight rating on shares of ARIA and increasing our price target to $9 following positive top-line data from the phase 3 SUCCEED study of ridaforolimus in advanced sarcoma. While the improvement in median PFS may appear modest at three weeks, overall risk reduction is significant at 28% and should be considered in the context of substantial unmet need. SUCCEED results should support broadening development by partner Merck and increase the likelihood of commercial success, in our view.
ARIA and partner Merck announced this morning positive phase 3 SUCCEED data for mTOR inhibitor ridaforolimus as maintenance therapy in patients with advanced sarcoma. Results of the 552-patient study suggested a 28% reduction in risk of progression (HR=0.72, p=0.0001) with median improvement of 3.1 weeks by independent review and 7.7 weeks by investigator site. Adverse events were in line with prior phase 2 experience with stomatitis, fatigue and thrombocytopenia.
We have previously estimated an incremental NPV for ridaforolimus in sarcoma of around $6/share with upside potential to $10.50/share, although with more modest three week benefit we see upside potential capped in the near term and have increased our price target to $9/share. Further upside potential could come from full data presentation, likely at ASCO in June, and from ponatinib pivotal data in CML, expected in 2012.
AI
