Shares of Celgene Corp (CELG.O) rose as much as 9.7 percent on Monday after a late-stage clinical trial showed its drug Abraxane improved survival in patients with pancreatic cancer.
Celgene, which unexpectedly reported the results late on Friday, did not give details of the extent of the improvement, saying it would do so at a medical meeting in January.
Abraxane is already approved to treat breast and lung cancer and the company will apply for approval from regulators to market the drug to treat pancreatic cancer as well.
Analysts sought to tease out the magnitude of the benefit using data from previous trials of Abraxane and historical results achieved by the chemotherapy used in the trial, gemcitabine.
"We believe Abraxane would very likely have provided at least a 2 month - if not greater - median overall survival benefit versus gemcitabine alone - clinically meaningful, in our view," said Brian Abrahams, an analyst at Wells Fargo Securities LLC, in a research report.
Celgene acquired Abraxane when it bought Abraxis BioScience in 2010 for $2.9 billion. The drug combines the cancer chemotherapy paclitaxel with a protein called albumin which Celgene believes helps deliver a greater amount of chemotherapy to cancer cells with fewer side effects.
Some analysts had viewed the price paid by Celgene for Abraxis as excessively high; but subsequent positive results of the drug in lung cancer, melanoma, and now pancreatic cancer, suggest the price may have been justified.
In October the company released results of a late-stage clinical trial showing patients with melanoma lived for a longer period without getting worse than those who received the chemotherapy dacarbazine.
Analysts say the drug will probably need to show that it also improves overall survival in patients with melanoma if it is to be competitive with Bristol-Myers Squibb's (BMY.N) Yervoy and Roche Holding AG's (ROG.VX) Zelboraf.
Celgene has said it expects sales of Abraxane, assuming it is approved in all indications it is being tested in, of $1 billion to $1.25 billion by 2015.
Matthew Roden, an analyst at UBS Securities LLC, said Abraxane could generate peak global sales of around $500 million in pancreatic cancer alone, possibly rising as high as $1 billion if the survival advantage is dramatic.
On the other hand, if the data is not sufficiently robust to drive high utilization, those sales could be in the $200 million range, he said in a research report.
Celgene's shares were up 4.8 percent at $74.92 on the Nasdaq on Monday morning, off an earlier high at $78.46.
(Reporting by Toni Clarke in Boston; editing by Matthew Lewis)