NEW YORK -- Despite positive data, Versicor Inc.'s antifungal agent, anidulafungin, is at a disadvantage to a rival product, according to a Wall Street firm.
Shares of Versicor, a California biotechnology firm, fell Tuesday after J.P. Morgan Securities (JPM) said post-treatment clinical data from the Phase III trial "potentially place anidulafungin at a commercial disadvantage" to Merck & Co.'s Cancidas.
J.P. Morgan analyst Maged Shenouda pointed to the effectiveness of anidulafungin after two weeks, which was significantly less than fluconazole, which is marketed under the Diflucan brand by Pfizer Inc. (NYSE:PFE - News) . He said in his research note the disparity in the two-week data "could potentially place anidulafungin at a commercial disadvantage."
At the two-week mark, endoscopic success was 64.4% for anidulafungin, compared with 89.5% for fluconazole, the company reported.
By comparison, Cancidas was 89.4% successful after two weeks during its Phase III trial.
If approved by the Food and Drug Administration (News - Websites), anidulafungin would compete with Cancidas for patients who have a resistance to fluconazole. Mr. Shenouda projected anidulafungin sales of $245 million for 2008, but previously had his estimate at $308 million.
Mr. Shenouda's bearish sentiment flies in the face of other Wall Street firms, who reaffirmed their more optimistic opinions.
Pacific Growth Securities analyst Thomas Dietz also noted the disparity in results between fluconazole and anidulafungin after two weeks, but said it is unlikely the data will have an impact on the marketability of the drug.
Mr. Dietz said that little use of the drug for esophageal candidiasis is anticipated.
"The target market for the drug is candidiasis/candidemia and invasive aspergillosis," he said in a research note.
Candidiasis is a fungal infection that occurs when the candida species enter the blood, causing bloodstream infection and spreading throughout the body, according to the Centers for Disease Control and Prevention Web site.
Versicor chose to demonstrate the effectiveness of anidulafungin through treating esophageal candidiasis because it was the quickest route to approval. The infection also represents an uncomplicated clinical setting, Mr. Dietz said. He owns shares of Versicor, and Pacific Growth has an investment banking relationship with the company.
Brean Murray analyst James Rosen said, "There may be a perception among investors that (Versicor's) results were not as good as expected. We think that notion is misguided and may present an excellent buying opportunity for shares of (Versicor)."
Mr. Rosen said in a research note he believes Versicor's strategy of submitting anidulafungin based on one form of antifungal treatment to the FDA as a prelude to other forms of treatment was wise. Mr. Rosen doesn't own shares of Versicor. In the next three months, Brean Murray expects to receive or intends to seek compensation for investment banking services from the company.
J.P. Morgan's Mr. Shenouda cut his rating on Versicor stock to "neutral" from "overweight" and said his downgrade was based on the drug's commercial appeal as applied to the treatment of esophageal candidiasis. He added he has high hopes for the drug to treat other forms of candidiasis.
Over the long term, Versicor and its products still offer an attractive risk- reward profile, he said, but added anidulfungin's disappointing secondary end- point data will mute near-term momentum, he said.
Mr. Shenouda doesn't own shares in Versicor, but a covering analyst, research associate or member of their respective households has a long position in the company. J.P. Morgan has acted as a lead or co-manager in a public offering of the company. A senior employee or executive officer of the firm is a director at Versicor.
Shares of Versicor were off $1.95, or 15%, to $11 in afternoon trading on the Nasdaq Stock Market (News - Websites).
- Roger Cheng, Dow Jones Newswires; 201-938-5393 |
