The ASCO Effect Hits Biotech Stocks

Brittney Barrett  |

Shares of Pharmasset (VRUS) have been gaining traction over the last several months alongside increasingly optimistic evidence for its new Hepatitis C therapy. Shares continue to push higher following the company’s announcement that, as a result of strong clinical data, the hepatitis C drug will be tested as an individual treatment rather than part of a larger cocktail of drugs or therapies. A number of biotech companies have been concentrating on new hepatitis C treatments, but few have seen enough positive empirical evidence to warrant standalone testing. At present, Pharmasset’s drug PSI-197 is being tested alongside two other leading hepatitis C therapies, peg-interferon and ribavarin. The company added that it plans to reduce the duration of the treatment regimen, which currently takes a number of weeks,

Cytori Therapeutics Inc. (CYTX) also unveiled exciting new data from a Phase II study of a cellular product employed to ease heart damage after cardiac arrest.

Ariad (ARIA), alongside partner Merck & Co., saw shares rise following pleasing Phase III results from a study of their bone and soft issue cancer treatment drug, ridaforolimus.

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EntreMed Inc. (ENMD) has also been climbing of later after the development that Selected Value Therapeutics would acquire the license for development and commercial distribution of EntreMed’s Phase II ENMD-2076 in China. The drug is a selective angiogenic kinase inhibitor, for the treatment of cancer.

Exelixis (EXEL) had an opposite experience with its new cancer therapy drug cabozantinib. The company announced at ASCO, where presentations tend to be a determinant of stock prices, that roughly 1 percent of participants in a clinical trial died of complications related to the drug.

Shares of Sunesis(SNSS) have also been falling after an ASCO related disappointment. The company’s Monday presentation of the design for Phase III clinical trial for its drug vosaroxin,  intended for treatment acute myeloid leukemia, appears to have disappointed biotech investors. The company expects an interim analysis toward the middle of next year.

Oxigene (OXGN), which received significant support in the weeks and month before ASCO, also plummeted on unmet expectations. There had been strong optimism surrounding zybrestate, the company’s thyroid cancer treatment. The clinical trials presented; however, led the enthusiasm to quickly dissipate.

Impax Laboratories Inc (IPXL) has also been suffering in of late, although without ASCO to blame. The company, a pharmaceutical outfit with generic and brand name divisions, received a warning from U.S. regulators demanding greater quality control at a manufacturing facility recently . As a consequence, J.P. Morgan reduced their rating of the stock to neutral from overweight, causing shares to decline sharply.



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