UPDATE 2-Ariad says independent experts positive on cancer drug
* Co says DMC recommends cancer trial to go on
* Interim analysis shows drug's safety profile consistent
* No modifications to study protocol recommended
* Shares up as much as 12 pct (Adds analysts' comments, details; updates stock movement)
BANGALORE, Sept 14 (Reuters) - Ariad Pharmaceuticals Inc (ARIA.O) said an independent committee of experts recommended that a late-stage trial of the company's experimental cancer treatment may continue, sending its shares up 12 percent.
The independent data monitoring committee (DMC) based its recommendation on the first interim efficacy analysis of the drug, ridaforolimus, which has been granted an orphan drug status by U.S. and European health regulators.
While analysts viewed Monday's announcement as a good news for the company, they did not think it was "overwhelmingly positive."
When a safety committee comes in and says continue the trial as planned, (investors) try to read between the lines that the outcome would be positive, Merriman Curhan Ford & Co analyst Joe Pantginis said.
However, Pantginis does not think Monday's news signify anything about the study's future.
"It is a positive signal that the study has not been halted for lack of efficacy or potential safety signals, but it is very tough to call the outcome of a study based on this," he added.
The DMC indicated that the safety data from the first interim analysis were consistent with the known safety profile of the drug and no modifications to the study protocol were recommended.
The late-stage trial, which has enrolled over 500 patients till date, was testing the oral drug in patients with metastatic sarcoma, a group of aggressive cancers of connective tissue in the body.
The main goal of the trial, named SUCCEED, is to achieve progression-free survival, the company said in a statement. Ariad has a development and marketing collaboration with Merck & Co Inc (MRK.N) on the drug, for cancer.
Full patient enrollment is expected to take place by the end of 2009 and the second interim analysis is expected by the end of the first quarter of 2010.
"We continue to believe the ultimate outcome of the trial will be positive, either at the second interim analysis or at completion in mid-2010," Oppenheimer & Co analyst Bret Holley said.
Ariad is also testing the drug, which works by blocking a protein known as mTOR and disrupting the growth, division and metabolism of cancer cells, for the treatment of breast, lung and prostate cancer.
In July, the company had reported promising top-line results from a mid-stage breast cancer study.
However, later that month, Ariad said Merck and it were reviewing the collaboration plan and Merck was yet to decide on the further development of the drug in breast cancer.
"It is just raising some red flags here that two years into the collaboration they are having disagreements on the collaboration of the drug," Merriman's Pantginis said.
Shares of Ariad were up 5 percent at $2.76 in late morning trade trade on Nasdaq. They had touched a high of $2.94 earlier in the session. (Reporting by Esha Dey in Bangalore; Editing by Aradhana Aravindan and Pradeep Kurup)
