Replies to post #49763 on Ariad Pharmaceuticals Inc fka ARIA

[Jesspro]

gdoll, they "the shorts" have their run. They got their pennies already. ARIAD has erected a high fence with the good data at ASCO that comes with a warning sign that says "climb at your own risk". They are smart. They know when to fold. As a matter of fact some if not many will join the bandwagon here. As of May 15, there are 41.5M shares short. I'm curious what it will be in the next publication.

[ariadndndough]

UBS
Click here for the full report

Ariad Pharmaceuticals
What We Learned at ASCO for ARIA
Conclusions: Constructive updates but broader implications less clear
We are attending the American Society of Clinical Oncology annual meeting in Chicago where ARIA presented several datasets for lead program Iclusig in CML as well as GIST, and for AP26113 in ALK+ non-small cell lung cancer (NSCLC). The Iclusig updates were mostly in-line, with the lung cancer update somewhat better than expected (although data available in the abstract ahead of the conference suggested a strong dataset). ASCO has been a good meeting for ARIA although we still think the upcoming dosing study (expected to start 2H14) will be the more important long-term driver for Iclusig.

Key points from the meeting
[1] For Iclusig, PACE data show that responses are maintained even when started at lower doses (30mg); consistent with previous updates. [2] Iclusig data in GIST suggests a rationale to move forward in the setting given promising clinical benefit data. While the path forward remains unclear (e.g. line of therapy), expert feedback was supportive. Tolerability could prove a differentiating factor and we expect a strategic decision in 2H14. [3] Early AP26113 data suggest potential differentiation vs. ceritinib (10ms PFS vs. 8mos) although updated data from the Novartis program presented this afternoon highlighted activity in brain mets (which had been a potential point of differentiation for ARIA). [4] While PACE data continue to suggest the risk of thrombotic events is reduced along with dose, the risk may be narrowing (now 33% for every 15mg, vs. 40% at ASH). [5] EPIC data show clear efficacy benefit vs. imatinib, although it is unclear if similar differentiation will be seen at lower doses.

Implications: Strong conference but think dosing study is most important
We remain Neutral following ASCO updates as the key de-risking event in our view is data from the ph2 dosing study which is expected to start 2H14. Progress of the Iclusig re-launch will be important but we see minimal upside risk to numbers.

Valuation: Neutral with $7.50 price target set by sum-of-the-parts
Our price target does not reflect any M&A premium in ARIA shares.




Matthew Roden, PhD
UBS AG