ASCO may mean big stock moves ahead for Puma, Clovis

ASCO targets war on cancer
ASCO targets war on cancer   

Can shares of Puma Biotechnology rebound?

That's one of the big questions on the minds of investors heading into the year's biggest cancer research event, the American Society of Clinical Oncology meeting, which kicks off Friday in Chicago.

Puma's shares sank earlier this month on an initial data release for its breast cancer drug, neratinib, ahead of the meeting. The results fell short of analysts' and investors' expectations, and weighed not only on the stock price but also on the company's potential prospects for a sale. Puma is likely hoping to change investors' minds about the drug's prospects.

Separately, investors also will be intensely focused on immunotherapies—drugs that harness the immune system to fight cancer—from Bristol-Myers, Merck, AstraZeneca, Roche and others as well as on a number of targeted therapies for lung, breast and other cancers.

RBC Capital Markets analyst Simos Simeonidis said he sees the potential for a rebound in Puma shares coming out of ASCO.

Attendees walk through the lobby at the American Society of Clinical Oncology (ASCO) annual meeting in Chicago. (File Photo).
Tim Boyle | Bloomberg | Getty Images
Attendees walk through the lobby at the American Society of Clinical Oncology (ASCO) annual meeting in Chicago. (File Photo).

"We reiterate our view that neratinib's phase 3 ExteNET data were positive and misread by many in the market following release of the ASCO abstracts two weeks ago," Simeonidis wrote in a May 27 research note, referring to the name of Puma's clinical trial. "We continue to expect that the full data presentation and Puma's investor meeting will help clarify the data."

Full results will be presented Monday morning at ASCO, while Puma will host an investor meeting that evening.

Clovis on the move again?

Another closely watched stock will be Clovis Oncology, which is in a race with AstraZeneca to bring a new lung cancer drug to market. Clovis was a big mover at last year's ASCO, on concerns about a high blood sugar side effect for its drug, rociletinib.

"Overall we continue to think there is room for both agents in the market given differential safety (and potentially efficacy) profiles," Cory Kasimov, an analyst at JPMorgan, wrote in a May 28 research note. He pointed out that all eyes will be on Clovis' updated data on progression-free survival, or how long the drug helped patients live without their cancer growing.

Linking cancer drug prices to their performance

Clovis will also have data on its drug rucaparib for breast and ovarian cancer. Mizuho analyst Peter Lawson said he expects the company will file for regulatory approval next year.

The late-breakers

Among the so-called late-breakers, the data sets highlighted at the conference, is late-stage data from small biotech CTI BioPharma and partner Baxter on their drug pacritinib in myelofibrosis, a bone marrow disorder. If successful, the drug would compete with Incyte's Jakafi, which the company has forecast to draw up to $565 million in revenue this year.

The main theme of ASCO will continue to be immunotherapy, as companies test their drugs in combination and in different cancers.

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"What we're learning more and more is that there are a number of drugs in this class, and while Merck and Bristol-Myers are the leaders, Roche and AstraZeneca have very similar drugs that are not far behind at all," Brian Skorney, an analyst at Robert W. Baird, said in an interview.

"What the debate within the sector really is right now is how differentiated are these drugs—is there any difference or are they all essentially showing the same data?"