ImClone, Merck Shares Jump on Erbitux Trial
The cancer drug Erbitux unexpectedly extended survival in a trial of patients with advanced lung cancer, sending shares of its maker, ImClone Systems, soaring as much as 24 percent.
Data from the trial, which was conducted by ImClone's European partner Merck and released on Tuesday, showed that Erbitux, in combination with chemotherapy, lengthened survival in patients with advanced non-small cell lung cancer, the most common kind, compared to chemotherapy alone.
"This is a huge surprise," said Han Li, a biotechnology analyst at Stanford Group in New York. "Many did not expect the study to work."
Investors had lowered their expectations following disappointing results from an earlier study, released in July.
The latest trial could form the basis of marketing applications in both the United States and Europe, analysts said.
"Non-small cell lung cancer sales could easily add $500 million in worldwide Erbitux sales," said Geoffrey Meacham, an analyst at J.P. Morgan.
ImClone executives were not immediately available for comment.
Erbitux, which is ImClone's only marketed product, is currently approved to treat colon cancer and head and neck cancer and generated 2006 worldwide sales of $1.1 billion. The company markets the drug in the United States with its partner Bristol-Myers Squibb.
Merck , which last year agreed to buy Swiss-based Serono to increase its portfolio of biotech drugs, licenses Erbitux from ImClone and has rights to sell the drug in Europe and certain other regions.
Merck's shares were up 5.8 percent by midday.
In Europe, about 400,000 new cases of lung cancer occur each year, accounting for 22 percent of all new cancer diagnoses. Non-small cell lung cancer accounts for around 80 percent of cancers of the lung.
Wolfgang Wein, Merck's head of oncology, said the findings from the trial are particularly encouraging given the history of disappointments with other targeted cancer therapies in treating lung cancer.
"Non-small cell lung cancer that has spread from the primary site is extremely difficult to treat so we are delighted with these results," he said in a statement.
Erbitux's promise in lung cancer could be bad news for Roche Holding and Genentech's competing cancer medicine Avastin.
Shares of Genentech , the world's second-biggest biotechnology company by sales, fell 1.5 percent to $78 in mid-morning trading on the New York Stock Exchange.
ImClone shares rose 21 percent to $45.91 on the Nasdaq after earlier in the session rising as high as $47.22.