some analyst comments on yesterday's data...
Cardiome drug tests fail to please
LEONARD ZEHR
Sometimes, you can't please all the people all the time.
That's what Cardiome Pharma Corp. found out yesterday after it reported strong efficacy and safety data from mid-stage testing of a potential blockbuster pill to treat rapid, irregular heartbeat. Its stock price went into cardiac arrest, dropping 11 per cent on the Toronto Stock Exchange.
So what happened?
Analysts who cover the stock suggest that after Cardiome reported interim test results in July that were well above expectations from patients receiving a low dose of its RSD1235 drug, investors began pricing into the stock price unrealistic expectations for results from patients who were on a higher dose of the drug in the clinical study.
Those high hopes didn't materialize yesterday, prompting the selloff. So, have opinions changed about the drug and the stock?
"Regardless of dose effect, we have a clear signal that oral RSD1235 is active against this blockbuster indication," Sprott Securities Inc. analyst David Dean said. Cardiome remains his "top pick," with a 12-month target price of $18.50.
Rodman & Renshaw LLC analyst Michael King agreed, noting that the pill version of the drug has "blockbuster potential that is not currently valued into the stock price." If further clinical studies pan out, he pegs the "market opportunity easily above $1-billion [U.S.]." He rates the stock "market outperform," with a 12-month target of $15. In Nasdaq Stock Market trading yesterday of nearly six million shares, the stock fell $1.51 to $11.80.
The Vancouver-based company yesterday reported that 61 per cent of both patient groups, receiving low and high dose levels of the drug, ended the study free from atrial fibrillation, compared with 43 per cent in the placebo group. The high dose group, however, fell shy of statistical significance because of a small number of patients in the group. And, pooling all the data in the Phase IIa study yielded a statistically significant benefit, compared with the placebo.
"We are thrilled with the outcome of this study," Cardiome chief executive officer Robert Rieder told a conference call yesterday. "When we envisioned this study, it was to get a sense of the safety and efficacy. We have done all that and more."
Versant Partners Inc. analyst Doug Loe said the overall data was "consistent with RSD1235's approvability, if replicated in larger pivotal studies." He figures investors were betting on a quick move into late-stage testing based on improved efficacy from the high dose group. "This did not materialize and we expect Cardiome shares to be weak until a Phase IIb clinical strategy is further defined."
As a result, analysts expect the company to conduct a larger Phase IIb clinical study to examine both a lower dose and longer treatment period in the first quarter next year.
On the safety front, Cardiome said there were no cases of serious arrhythmia, a condition often associated with anti-arrhythmia drugs. A small number of patients in both study groups experienced an increased rate of slower heart rate, which "could actually turn out to be a beneficial aspect of the drug," Mr. King said. |
