Ariad Pharmaceuticals Inc fka ARIA

[moneyman1010]

MERRILL LYNCH - RACHEL MCMINN

She thinks no approval. hopefully wrong like the rest of her calls. they also state that its "unremarkable" to their calculations.

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Ariad Pharmaceuticals, Inc.
Quick thoughts on
ridaforolimus
?? FDA looks likely to reject ridaforolimus, unremarkable to us
FDA briefing documents became available for ARIA and partner MRK's mtor
inhibitor ridaforolimus for advanced soft tissue and bone sarcoma in patients
receiving prior chemotherapy. Based on our read of the documents, we do not
expect the March 20th panel to support approval and we ultimately expect the
FDA to issue a complete response letter, noting that the efficacy profile does not
outweigh the safety risks. As a reminder, we do not model ridaforolimus approval
(either the $25M milestone from MRK or future sales based royalties), and we
believe the core value driver for ARIA shares remains ponatinib for CML
(expected market entry early 2013) and the company's early stage ALK inhibitor
(initial data 2H12). We do note, however, that company cash use guidance
assumes approval, so we expect a guidance revision following the FDA decision,
assuming we are correct. We model an equity raise in 2H12 following key
company milestones.
Efficacy/safety profile not favorable
The FDA calculated PFS in the study as 16.1 weeks for ridaforolimus vs 14.0
weeks for placebo and also noted that a statistically significant difference in PFS
does not necessarily translate into a clinical benefit. The original data reported by
ARIA was 17.7 weeks vs 14.7 weeks for PFS. The FDA noted the safety profile
for ridaforolimus is similar to other mtor inhibitors (stomatitis, fatigue, GI issues,
etc), but noted particular concern for pneumonitis, infection, and renal failure. The
FDA will ask the committee to vote on whether the drug should be recommended
for approval in light of the small differences observed in PFS and OS and the
adverse event profile.
Company Update NEUTRAL
Equity | United States | Biotechnology
16 March 2012
Rachel McMinn [phone]
Research Analyst
MLPF&S
[e-mail]
Masha Chapman [phone]
Research Analyst
MLPF&S
[e-mail]
?? Stock Data
Price US$15.09
Price Objective US$16.00
Date Established 28-Feb-2012
Investment Opinion C-2-9
Volatility Risk HIGH
BofAML Ticker / Exchange ARIA / NAS
Bloomberg / Reuters ARIA US / ARIA.O
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