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: Has Ariad Pharmaceuticals (NASDAQ: ARIA) Developed a Billion Dollar Cancer Treatment Pipeline Based on Ridaforolimus and Ponatinib
Posted on February 9, 2011 by Editor
Less than a month ago Ariad Pharmaceuticals (NASDAQ: ARIA) released favorable data regarding their Phase 3 SUCCEED sarcoma trial and shares jumped to a 52-week high of 7.32 with trading volume exceeding 18 million on the day they announced the findings. Having placed themselves in a position to capture FDA approval for their cancer fighting compound Ridaforolimus it appeared as if ARIA would continue to attract investor attention and push share prices further north. Instead the price per share has dipped down around the 6.40 – 6.50 range and volume has fallen to around the 1.5 million mark, a somewhat surprising scenario especially as it relates to a company that has built a solid pipeline that could generate billions in the market of non-treatable cancers.
While there is always skepticism surrounding an FDA approval ARIA’s Ridaforolimus is based off the Rapamycin structure, something that has already given rise to a pair of oncology drugs (Afinitor and Torisel) that are already on the market. This should alleviate many of the concerns surrounding FDA approval for ARIA.
Making things more attractive for ARIA investors is the fact that the Phase 3 SUCCEED trial was specifically for soft tissue/bone sarcomas, they are also in the process of studying the effectiveness of the compound in the treatment of breast cancer, prostate cancer, endometrial cancer, and non-small cell lung cancer. If they could manage to gain approval for Ridaforolimus as a treatment for these diseases then the monetary gains for the company could be exponential. As it stands there are limited treatments for sarcomas and what ARIA has achieved thus far has opened the door of possibilities.
Strengthening ARIA’s position is the fact that they have a solid relationship with Merck (NYSE: MRK) which is co-developing and licensing the oral mTOR inhibitor Ridaforolimus. As part of this partnership ARIA has said they would receive a $25 million milestone payment from MRK after the acceptance of the new drug application. MRK plans to file for marketing approval of oral Ridaforolimus later this year.
Data from ARIA’s late-stage trial was released on January 18 and it showed they had met the primary endpoint of improved progression-free survival (PFS) compared to placebo for patients with metastatic soft-tissue or bone sarcomas who previously had a favorable response to chemotherapy. This is the news that sent shares climbing to a new 52-week high and brought on the speculation that ARIA was a candidate for takeover.
While takeover talk always sparks interest among investors the reality is if ARIA can continue to meet its endpoints, including overall survival and the safety profile of Ridaforolimus, then the company along with its investors may have no real interest in selling. As it stands the initial data seems to support the secondary endpoints and the most common side effects observed in their study have included mouth sores, fatigue, diarrhea, and thrombocytopenia, all consistent with the known safety profile of Ridaforolimus.
Of concern to some is the relatively small market that the sarcoma treatment would serve, it is said that less than 10,000 patients suffer from soft-tissue or bone sarcomas in the United States. That would be a legitimate concern if ARIA was banking everything on the treatment of sarcomas but again their pipeline shows they are positioned favorably for advancements in the treatment of breast cancer and endometrial cancer, both of which command a significant portion of the cancer treatment market and many expect approval for ARIA treatments to come shortly after FDA approval for their sarcoma treatments.
ARIA also appears to be on stable financial ground and should have no problem funding their studies through 2011. That position would be strengthened with FDA approval as they would receive their milestone payment from MRK and alleviate any concerns about further dilution to raise additional funds.
Not to be lost in all of this is the fact that ARIA has more than just Ridaforolimus, they have Ponatinib as well. This investigational pan-BCR-ABL inhibitor is currently in a pivotal Phase 2 clinical trial in patients with chronic myeloid leukemia and Ph+ acute lymphoblastic leukemia. There has been cautious optimism surrounding this treatment but if they can continue to move forward with positive results and add Ponatinib alongside Ridaforolimus then ARIA could quickly become a major player in the pharmaceutical market.
Naturally there have been some concerns about ARIA as they have gone years without producing any significant financial figures through revenue, they have no FDA approved product on the market. Those concerns remained even when the Phase 3 SUCCEED trial started as many considered it to be a wasted effort and overly ambitious due to the difficulty of treating sarcomas. Now it looks as if ARIA could silence the doubters and while they have been methodical in their development approach it appears as if their diligence could be ready to pay off. Investors may get a better grip on where ARIA is on February 14 when ARIAD CEO Harvey J. Berger presents at the 13th Annual BIO CEO & Investor Conference in New York. Berger will be providing an overview of the company’s pipeline as well as detail progress on their lead compounds including Ridaforolimus and Ponatinib. Positive news could spark another push north in share price as well as drive volume, two things that shareholders have been anxious to
link: http://www.otcequity.com/?p=822
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