May 1, 2014 / 11:36 AM / 4 years ago

UPDATE 2-Merrimack shares soar as cancer drug combo improves survival

* To seek U.S. marketing approval this year

* Drug alone did not achieve statistically significant survival rate

* Shares rise as much as 75 pct (Adds comments from conference call, analysts’ comments; updates stock movement)

By Vrinda Manocha

May 1 (Reuters) - Merrimack Pharmaceuticals Inc’s shares soared 75 percent after the company said its lead experimental cancer drug improved the overall survival rate, when used as a combination therapy, in patients with metastatic pancreatic cancer.

The company said on Thursday it would apply for U.S. marketing approval this year for the combination, which includes two existing drugs used to treat cancer.

Mizuho Securities analyst Peter Lawson said the drug could be approved in 2015 and generate sales of $909 million by 2020.

“(The drug) should act as catalyst for their other cancer indications, and also earlier pipeline molecules that use the same or similar technology,” he said.

The company is testing the drug to treat colorectal cancer, a type of brain tumor and a rare form of bone cancer.

Merrimack CEO Robert Mulroy said on a call with analysts that the company would market the drug in the United States and was in talks with partners to sell it outside the country.

Analysts said the drug showed a good survival benefit, compared with Celgene Corp’s cancer drug, Abraxane, which received U.S. approval in September for the initial treatment of metastatic pancreatic cancer.

Abraxane, which is used in combination with chemotherapy drug gemcitabine, showed a 1.8 month overall survival benefit.

Merrimack said the combination of its injectable drug, MM-398, and two others showed an overall survival of 6.1 months, compared with 4.2 months shown by the other two drugs alone.

The combination included chemotherapy drug 5-fluorouracil (5-FU) and leucovorin, which helps enhance 5-FU’s effectiveness.

The late-stage study was testing the therapy in patients who were earlier treated with gemcitabine.

“This is an exceptional result given the significant unmet need in this difficult-to-treat patient population,” JP Morgan analyst Geoff Meacham wrote in a note.

Meacham said based on prior feedback from physicians, even a 1.5-month benefit on overall survival would have been considered clinically meaningful.

Merrimack said MM-398 showed an overall survival of 4.9 months when used alone, which was not statistically significant.

The company said patients taking only MM-398 experienced a higher level of adverse events than those given the combination.

Merrimack said the most common serious adverse events in patients given the combination were an abnormally low count of a type of white blood cells, fatigue, diarrhea and vomiting.

MM-398 works by delivering a chemotherapy drug known as irinotecan to a tumor in an enclosed particle, enabling it to accumulate and be retained in the tumor.

Pancreatic cancer is the fourth leading cause of cancer-related deaths in the United States. The disease is difficult to diagnose as there are usually no symptoms until it spreads to other organs.

About 46,420 new pancreatic cancer cases will occur in the United States in 2014, according to the American Cancer Society.

Merrimack’s shares gave up some of their gains to be up about 61 percent in late morning trade, after hitting an 18-month high of $7.65 early in the session.

The stock was the biggest percentage gainer on the Nasdaq. More than 20 million shares changed hands by 11:37 a.m. ET, nearly 20 times their 10-day moving average. (Reporting by Vrinda Manocha in Bangalore; Editing by Sriraj Kalluvila)

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