July 28, 2009 / 1:29 PM / 8 years ago

UPDATE 3-Ariad Pharma says breast cancer drug shows promise

* Says observed 5 responses so far in breast cancer study

* Shares soar as much as 42 pct (Adds analyst comment)

By Anand Basu

BANGALORE, July 28 (Reuters) - Ariad Pharmaceuticals Inc ARIA.O reported promising top-line results Tuesday from a mid-stage study of its experimental treatment for breast cancer, sending its shares up as much as 42 percent.

The study was designed to test whether Ariad’s drug ridaforolimus would result in objective evidence of tumor shrinkage when used in combination with an existing treatment trastuzumab, in patients with metastatic breast cancer who had become resistant to trastuzumab.

“At least five partial responses have been observed thus far, which would meet the trial’s pre-specified criterion for a positive outcome, pending independent review of radiologic findings,” the company said in a statement.

Ridaforolimus works by blocking a protein known as mTOR and disrupting the growth, division and metabolism of cancer cells, and Ariad is co-developing the drug with Merck & Co Inc (MRK.N).

“The data is promising although it is preliminary and it validates the ridaforolimus approach for mTOR inhibition,” Merriman Curhan Ford analyst Joe Pantginis said.

“The biggest driver for the stock right now is still going to be the ongoing Phase III study for sarcoma,” he added.

Ariad is also conducting a late-stage trial of ridaforolimus for the treatment of sarcoma, a group of aggressive cancers of connective tissue in the body.

Analyst Pantginis said investors, at this point, would be wondering if Merck would acquire Ariad outright.

“Merck is certainly looking at the entire clinical program in multiple tumor types, so whether it is first waiting to get a read on the Phase III study remains to be seen,” he said.

Merck could not immediately be reached for comment.

Ariad also said it completed enrollment for an early-stage study of the same drug in combination with another therapy, bevacizumab, to treat solid tumors in patients who had become bevacizumab-resistant.

This study had preliminarily shown a 35 percent clinical-benefit response rate, the company added.

On Monday, Ariad reported positive preliminary results from an early-stage trial of an investigational compound, AP24534, in patients with advanced blood cancers who were resistant to other drugs.

Shares of Ariad touched a high of $3.48, making them one of the top percentage gainers on Nasdaq, before paring some gains to trade up 14 percent at $2.80. (Editing by Anthony Kurian and Aradhana Aravindan)

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