Hi Bennett, any comments from the news today ?
NEW YORK (Dow Jones)--Shares of Idec Pharmaceuticals Corp. (IDPH) fell as
much as 19% following news that it suspended phase III trials on a rheumatoid
arthritis drug it is developing with SmithKline Beecham PLC (SBH).
SmithKline's shares had also dropped - by as much as 0.7% - but not nearly as
much as Idec's, which were recently down 2 3/8, or 9.2%, to 23 1/2 on more than
four times average daily volume.
''Clearly this product has greater value for Idec than it does for the product portfolio
of SmithKline,'' said Anthony Butler, a biotechnology analyst at Lehman Brothers
Inc.
The reason, Butler said, is because while SmithKline has a number of products in its
stable, Idec has only two that are primary - one is an antibody against
non-Hodgkin's lymphoma and the other is the rheumatoid arthritis drug.
''It being in a phase III clearly has a huge amount of value for Idec,'' Butler said.
''Idec does not make money. It may have a new product within the year, but
probably what would drive and enhance profitability would be its next product,
which was this product.''
Idec does have a second-generation antibody that could reach phase III by 1998,
Butler added. ''There is a backup,'' he said. ''The worst case scenario is that they're
nine months to a year behind.''
The fact that the phase III clinical trials of the rheumatoid arthritis drug were only
suspended also gives hope that they can resume, the analyst said.
The companies said earlier that the decision to suspend the trials was based on
observations that a higher number of patients were suffering from reduced CD4 cell
counts in the phase III trials than had been observed at the phase II trial stage. CD4
cells are one type of immune cell that is responsible for some of the effects of
rheumatoid arthritis.
SmithKline's shares have recently rebounded, trading at 88 1/4, up 1/2, or 0.6% |
