Amgen Fools Us
One of my favorite exercises at the Breaking News Desk is to figure out whether something is news, and how it might move the stock involved.
This morning, a headline moved regarding Amgen’s anemia drug Aranesp. I’m not a pharmaceutical expert -- that’s why we have reporter Mike Huckman -- but since it involved a very large company and a drug I’d actually heard of, we knew it was news.
Here’s where it got interesting: The initial headline was that a study showed Aranesp having no significant effect on survival rates for patients afflicted with small-cell lung cancer, although it did improve hemoglobin levels in these patients.
If you follow the pharmaceutical industry on a casual basis, it sounds like a typically negative headline.
But it turns out that just the opposite was true: The issue of safety for Aranesp has been a big worry for Wall Street. The fact that Aranesp didn’t affect survival rates NEGATIVELY -- as opposed to the fact that it didn’t increase them -- was the key here. And Wall Street’s reaction was immediate and swift: the stock was up about 6% when the news first hit, and it traded sharply higher throughout the trading day.
It’s just another quirk that I’ll store in my bag of tricks for the next drug industry pronouncement.