Biotech and Pharma Stocks Get ASCO Spotlight

Brittney Barrett |

The American Society of Clinical Oncology’s (ASCO) annual meeting approaching in June has a history of driving up biotech and pharma stocks, particularly cancer drug developers. Last night, with the release of thousands of abstracts on cancer drugs that will be featured in the ASCO meeting, investors got their earliest insight into the drugs and companies that could make an impact at the conference and on Wall Street.

Observing the patterns of the of biotech stocks after the release of the abstracts, investors may have a better idea of which stocks have promise and the others, that in spite of premature optimism, may have peaked in advance of the meeting.

Among early ASCO favorites is Oxigene (NASDAQ: OXGN). Shares have climbed over 220 percent over the last month in anticipation of the exciting release of information on its experimental drug Zybrestate. Zybrestate inhabits a corner of cancer drugs known as vascular disrupting agents (VDAs), which are intended to locate and demolish the blood vessels within tumors. The effect starves the tumor of oxygen and nutrients with the intention of shrinking its size. Zybrestate is intended for use alongside chemotherapy. The drug is unique in that it addresses later stage tumor blood vessels, whereas other offerings within its class like Roche’s Avastin prevent tumors for developing new blood vessels.

Zybrestate would seem promising, and judging by the progress of the stock and its high volume, this was an opinion held by many investors.  Last night’s development puts Zybrestate, and Oxigene, among the worst performing biotech stocks of 2010, under added scrutiny.

At ASCO, the company will present a final survival analysis from the "FACT" phase II/III study of the drug in patients afflicted with anaplastic thyroid cancer (ATC).  ATC sufferers in the study live a median average of 4 months if being treated with Chemo alone according to the abstract. The addition of Zybrestate in the chemo regimen revealed patients living for an average of 5.2 months, or a 35 percent increase deemed less than statistically significant according to the abstract.

Ariad (NASDAQ: ARIA) and their sarcoma drug ridaforolinus, fell victim to similar fate as Oxigene. Earlier disclosed results regarding the drug’s contribution to length of survival seemed promising, but yesterday evening’s data revealed a trend that fell short of statistical significance. Shares of the company reacted accordingly.

The disappointing results have allowed other ASCO participants to enter into focus before and after the conference, which will run from June 3-7. Among the potentially impressive candidates is Vical (NASDAQ: VICAL), which is currently developing a skin cancer vaccine. Another cancer vaccine maker, Agenus (NASDAQ: AGEN) has also attracted attention and investor activity for its early-stage brain tumor vaccine. Despite higher volume and positive sentiment shares of Agenus continue to trade beneath $1.00.

Other standouts include Incyte (NASDAQ:INCY), which alongside its partner Novartis (NASDAQ: NVS) is in the process of developing a drug intended for treatment of myelofibrosis called ruxolitinib. Myelofibrosis causes abnormal bone marrow stem cells to produce scar tissue that supplants healthy marrow. Those afflicted commonly experience anemia and enlarged spleens. Optimistic results from an earlier U.S. study entitled COMFORT I, indicated that treatment with 24 weeks of ruxolitinib significantly reduced the spleen size in 42 percent of afflicted patients versus a 0.7 percent rate of improvement in patients treated with a placebo. Alongside the positive results, which also included a 33 percent lower risk of death, there were safety concerns regarding lowered platelet counts.

The newest data, from a European study of the drug called COMFORT II is highly anticipated at the conference. The same could be said of the survival statistics from the phase III investigations of skin cancer drugs from Bristol-Myers Squibb (NYSE: BMS) and the initial results of a kidney cancer drug from Pfizer (NYSE: PFE). The outcome of the Pfizer test, while attention-grabbing, appears to have elicited mixed opinions from investors awaiting the reveal.

Another myelofibrosis drug to garner some positive investor attention is YM BioSciences Inc. (NYSE Amex: YMI). The company reported updated interim results for the first 60 patients with high/intermediate-risk myelofibrosis who have completed a minimum of three cycles of treatment (12 weeks) in its ongoing Phase I/II multi-center study.  The study revealed a reduction in spleen volumes and a 50 percent anemia response rate overall with a 58 percent rate in transfusion-dependent patients.

Investor attention was also called toward Medivation (NASDAQ: MDVN) for e prostate cancer drug MDV3100. The drug intends to use hormonal alternatives to capture advanced-stage sufferers averse to castration. It is currently in its phase II trial.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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