January 18, 2011 / 1:38 PM / 8 years ago

UPDATE 2-Ariad's cancer drug meets late-stage goal, shares rise

* Says partner Merck to file for marketing approval in 2011

* Shares rise 30 pct pre-market (Adds comments from conference call, analyst’s comments; updates share movement)

BANGLAORE, Jan 18 (Reuters) - Ariad Pharmaceuticals ARIA.O said its experimental cancer treatment licensed to Merck & Co (MRK.N) met the main goal of a late-stage trial, sending its shares up 30 percent to a four-year high.

The Cambridge, Massachusetts-based company said its oral drug, ridaforolimus, significantly improved progression-free survival in patients with metastatic soft-tissue or bone sarcomas, who had a favorable response to chemotherapy.

“We view this development as a positive surprise as investor expectations were relatively low given that sarcoma is a tough-to-treat heterogeneous disease,” said JP Morgan analyst Cory Kasimov.

Kasimov said the positive data in sarcoma patients will attract investor’s attention to other clinical studies where the drug is being tested.

Merck is developing the oral drug for several types of cancers under an exclusive license agreement with Ariad, including bone cancer and breast cancer. [ID:nSGE6440FJ]

In a conference call, Ariad said it would receive $25 million in milestone payment from Merck after the acceptance of its new drug application.

Ariad said Merck plans to file for marketing approval of oral ridaforolimus this year.

Cowen and Co has estimated the medicine could generate sales of $250 million in 2015 if approved.

The most common side effects observed in the study were consistent with the known safety profile of ridaforolimus, Ariad said.

Ariad shares, which have gained 33 percent since the company reported data from ridaforolimus for another indication in October, were up 26 percent at $6.61 in morning trade on Tuesday on Nasday. They earlier touched a four-year high of $6.84. (Reporting by Anand Basu in Bangalore; Editing by Vyas Mohan)

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