QLT stock climbs on FDA ruling
Leonard Zehr
Shares of drug developer QLT Inc. jumped 8.6 per cent yesterday after the U.S. Food and Drug Administration gave QLT's lead cancer drug fast-track review status.
QLT's stock, which rose $1.03 to $13.03 on the Toronto Stock Exchange, has been out of favour this year because of a perceived lack of new products in the pipeline and lackluster sales growth of its Visudyne treatment to prevent blindness.
Fast-track review could accelerate by six months the launch of the company's late-stage tariquidar drug to prevent cancer patients from developing resistance to chemotherapy drugs. It essentially allows QLT to submit clinical data and have it reviewed by the FDA as it becomes available, rather than waiting to submit all of the data at the end of testing.
Analysts said the FDA decision could shift investor focus away from Visudyne and to tariquidar.
"This could be a wake-up call to the fact that QLT really does have a pipeline that is advancing," said Brian Bapty, a Raymond James Ltd. analyst who rates the stock "outperform," with a 12-month target of $21.50.
"There's no question in my mind that if the clinical data is compelling, tariquidar has the potential to be a bigger product than Visudyne," he said. "With compelling data, QLT should be able to build its own sales and marketing organization to distribute the drug in North America."
QLT and its marketing partner Novartis Ophthalmics are forecasting sales of $275-million (U.S.) to $300-million for Visudyne this year, an increase of 25 per cent to 35 per cent from 2001.
David Martin, an analyst with Yorkton Securities Inc., has a 12-month stock price target of $18 (Canadian) for QLT.
"We continue to believe there is upside in QLT stock with about $4.50 per share of our target price attributed to tariquidar," he said.
Tariquidar has been shown to inhibit a molecule that pumps chemotherapy drugs out of cancer cells, causing drug resistance.
Mr. Martin said tariquidar appears to be further ahead in clinical testing than two other competing third-generation drugs being tested by Ontogen Corp. of Carlsbad, Calif. and Eli Lilly & Co. of Indianapolis.
Vancouver-based QLT is now enrolling 1,000 patients at 100 clinics in North America and Europe for a pivotal Phase III program, using tariquidar in combination with chemotherapy to treat lung cancer patients.
The drug also is in Phase II testing with breast cancer patients in the United States.
An interim analysis of the first 100 lung cancer patients is expected next year.
Copyright 2002 The Globe and Mail |
