Ariad Pharma downgraded on gains over last year

NEW YORK -- An Oppenheimer & Co. analyst downgraded shares of Ariad Pharmaceuticals Inc., saying the company's stock price already reflects potential approval for its leukemia drug ponatinib.

THE OPINION: Analyst David Ferreiro on Monday cut his rating on Ariad shares to "Perform" from "Outperform." Ferreiro said the Food and Drug Administration should approve ponatinib as a treatment for chronic myeloid leukemia in early 2013, as Ariad expects. But he said Ariad may have trouble getting approval to market the drug as a primary treatment for the disease.

He added that ponatinib will face still competition in 2015, when low-cost generic versions of Novartis AG's cancer drug Gleevec reach the market. Ferreiro said a lot of the stock's recent gains have come from optimism about AP26113, a drug in early-stage testing as a treatment for lung cancer. He said there is little clinical evidence supporting AP26113 and it's too soon to assign it a lot of value.

Ferreiro raised his price target to $23 per share from $20.

THE STOCK: Ariad shares slipped 45 cents, or 2 percent, to $22.34 on a down day for the markets. The shares have doubled in value over the last year.