March 30, 2007 / 5:32 PM / 12 years ago

Cancer vaccine stocks soar on Dendreon panel vote

BOSTON (Reuters) - Shares of cancer vaccine makers soared on Friday after an advisory panel to the U.S. Food and Drug Administration recommended approval of a product made by Dendreon Corp. DNDN.O

Metastasized breast cancer cells are seen in the liver in an undated handout image from the National Cancer Institute. Shares of cancer vaccine makers soared on Friday after an advisory panel to the U.S. Food and Drug Administration recommended approval of a product made by Dendreon Corp. The surprise ruling paves the way for approval of the first ever cancer vaccine and provides a vote of confidence in a field that has been dogged by failure and investor skepticism. REUTERS/Handout

The surprise ruling paves the way for approval of the first ever cancer vaccine and provides a vote of confidence in a field that has been dogged by failure and investor skepticism.

“This is a significant step not just for Dendreon but for the industry as a whole,” said Steve Brozak, an analyst at WBB Securities. “However, it remains to be seen what the practical application will be and how physicians will adopt it.”

Dendreon shares more than doubled to $13.54 by midday from $5.22 at Thursday’s close after reaching as high as $18.05.

If the FDA follows its panel’s advice, which it usually does, Dendreon vaccine Provenge will be the first to directly spur the immune system into attacking cancer — an approach that is attracting growing interest among drugmakers big and small.

Therapeutic vaccines are designed not to be given before a disease develops but to prevent the disease from progressing once it has been diagnosed.

Antigenics Inc. (AGEN.O) was up 8.1 percent to $2.14, Cell Genesys Inc. CEGE.O up 23.4 percent to $4.32, Genitope Corp. GTOP.O up 8.6 percent to $4.03 and Favrille Inc. FVRL.O up 19.5 percent to $3.13.

MAY BE CONTINGENT

Earlier this week, France’s Sanofi-Aventis SA (SASY.PA) signed a deal with Oxford BioMedica Plc (OXB.L) for the rights to the British biotech firm’s experimental cancer vaccine, TroVax.

Some analysts, including Jonathan Aschoff of Brean Murray Carret & Co., say the FDA will not approve Dendreon’s vaccine outright but will issue the company an “approvable” letter, which means approval would be contingent on certain factors such as results from other trials.

“We maintain our belief that Dendreon is banking more on the dire need for safer prostate cancer therapies, given the large and growing incidence of the disease, and less on the merits of its trials’ results,” Aschoff said in a research note.

While the risks for cancer vaccines remain high, Provenge is the first ever to be reviewed by an FDA advisory panel, and while the data from Dendreon’s trial did not fully establish efficacy, the panel ruled that there was sufficient evidence to warrant approval.

The FDA’s response was greeted enthusiastically by rivals.

“We are encouraged by the fact that the FDA has shown some flexibility in the way data is interpreted from a cancer vaccine trial,” said Garo Armen, chief executive of Antigenics, whose cancer vaccine Oncophage failed a late-stage trial in kidney cancer.

The company plans to release updated data from the trial in June.

Cancer vaccines are made using various different methods.

Dendreon, for example, makes its vaccine by taking blood, separating a patient’s dendritic cells, which are part of the immune system’s cellular army, processing them to be able to target a protein fragment expressed on prostate cancer cells, and activating the immune system to kill the cell.

Antigenics, by contrast, takes cancer tissue following surgery, extracts certain proteins that activate the immune system and injects the enriched protein back into the body through the skin.

Additional reporting by Ben Hirschler in London

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