UPDATE 1-EU agency backs IDM Pharma's bone cancer drug; shrs up
(Adds CEO and analyst comments, updates stock movement)
Nov 18 (Reuters) - IDM Pharma Inc IDMI.O said advisors to the European Commission recommended the approval of its experimental treatment for a rare bone cancer, sending its shares soaring as much as 75 percent.
The Committee for Medicinal Products for Human Use (CHMP), whose assessments guide the Commission's drug approval decisions, recommended approval of the drug, mifamurtide (L-MTP-PE), for the treatment of non-metastatic, resectable osteosarcoma, a rare bone tumor that typically affects children and young adults.
Commission rulings normally follow within a couple of months of the initial endorsement of London-based CHMP.
The company, which is expecting an European approval for the drug in the first quarter, now plans to finalize its strategic options that include partnerships and a potential sale of the company, Chief Executive Timothy Walbert said.
Walbert said the company is currently in talks with various parties but declined to comment on the nature of the deals or the companies.
Last December, IDM Pharma had said it was planning to manage its cash burn and evaluate strategic alternatives as it expected significant additional costs related to the bone cancer drug.
Rodman & Renshaw analyst Reni Benjamin said a partnership is likely upon approval and named privately held Sigma-Tau S.p.A. as a potential suitor.
"Very rarely do we see these regulatory agencies go against the opinion of the panel, so I would expect approval," analyst Benjamin said.
Benjamin, who upgraded the stock to "market perform" from "market underperform," said about $10 million to $20 million in worldwide revenue is a reasonable expectation, but CEO Walbert declined to comment on the revenue expectations.
L-MTP-PE, which received orphan drug status in Europe in 2004, would be entitled to a marketing exclusivity of 10 years upon approval. The drug has an orphan drug status in the United States as well.
IDM Pharma is currently also gathering patient follow-up data from a late-stage trial of L-MTP-PE in order to respond to a non-approvable letter received from the U.S. health regulators in August last year.
The company was initially planning to resubmit its new drug application for L-MTP-PE in the United States in the second-half of 2008, but now plans to resubmit only after European approval.
"They are independent regulatory bodies that make their own decisions, but having an approved product and all the work that we have done to gain approval will be applicable to our effort in the United States," CEO Walbert said.
However, Rodman's Benjamin feels the U.S. Food and Drug Administration would likely take a "tougher stance" on the application, "but it is for an unmet need in a very small patient population, so some sort of conditional approval in the U.S. is always possible." Shares of the company were trading up $1.00 at $2.55 in morning trade on Nasdaq. They had touched a high of $2.71 earlier in the day. (Reporting by Esha Dey in Bangalore; Editing by Pratish Narayanan, Jarshad Kakkrakandy)
