ImClone soars after setback to rival Amgen drug
NEW YORK, March 23 (Reuters) - Shares of ImClone Systems Inc. IMCL.O soared 19 percent in premarket trade on Friday after Amgen Inc. (AMGN.O) canceled a clinical trial involving a colon cancer drug that competes with ImClone's Erbitux medicine.
Amgen shares fell 3.5 percent on Friday after the world's largest biotechnology company stopped a clinical trial involving its Vectibix drug for safety reasons and analysts slashed their sales forecasts for the product.
Amgen said on Thursday it discontinued the trial after discovering Vectibix reduced chances of survival.
An interim look at the data found colon cancer patients treated only with chemotherapy and Avastin, a biologic cancer drug sold by Genentech Inc. DNA.N, were more likely to live than patients who also received Vectibix, Amgen said.
Analysts projected the ending of the study would benefit Erbitux. ImClone sells Erbitux with Bristol-Myers Squibb Co. (BMY.N)
Friedman Billings Ramsey analyst Jim Reddoch said in a research note that the trial failure "puts greater distance between Erbitux and Vectibix."
"We feel more confident in Erbitux's abilities to meet or beat sales expectations after last night's news," Reddoch said in a research note that maintained an "outperform" rating on ImClone stock.
Reddoch lowered his peak sales estimate for Vectibix to $762 million, down from $912 million. Reddoch lowered his price target for Amgen stock to $60 from $65, while maintaining his "market perform" rating.
Merrill Lynch analyst Eric Ende said in a research note that even though the negative result came within a context used with other therapies, the implications would be broader.
"We expect (Bristol-Myers) and ImClone to use this negative outcome to drive significant share for Erbitux in all segments of the market at the expense of Vectibix," Ende said in a research note.
Ende cut his sales estimates for Vectibix to $143 million in 2008 from $456 million previously, and to $170 million in 2010 from $777 million previously.
ImClone shares rose to $40.41 in early electronic trading on Friday from a close of $33.88 on the Nasdaq. Amgen shares fell to $58.35 from a close of $60.47.
((Reporting by Lewis Krauskopf, editing by Dave Zimmerman; Reuters Messaging: Lewis.Krauskopf.reuters.com@reuters.net; lewis.krauskopf@reuters.com; 646-223-6082)) Keywords: IMCLONE AMGEN SHARES/
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