Immunex Shares Rise on Investor Hopes for Drug Launch (Update2)
Bloomberg News
November 19, 1998, 6:03 p.m. ET
Immunex Shares Rise on Investor Hopes for Drug Launch (Update2)
(Adds analyst comment, closes shares.)
Washington, Nov. 19 (Bloomberg) -- Immunex Corp. shares rose
as much as 19 percent, driven by investor optimism about initial
sales of its recently-approved Enbrel rheumatoid arthritis drug.
Shares in the Seattle, Washington-based company rose 9 7/16
to close at 86 15/16 in trading of more than 2.3 million shares,
four times its three-month daily average. Earlier, shares touched
a 52-week high of 91 7/8.
The rise was driven in part by increased confidence that
doctor and patient demand will be strong for Enbrel, approved
this month by the U.S. Food and Drug Administration.
Immunex disclosed in one of its regulatory filings how much
it will spend to build its inventory of the drug -- which may be
a sign that demand is robust.
Immunex has made ''significant purchase commitments to the
contract manufacturer for inventory of Enbrel totaling
approximately $104 million at Sept. 30,'' the company said in its
quarterly filing with the U.S. Securities and Exchange
Commission.
Salomon Smith Barney analyst Meirav Chovav said she expects
to raise her sales estimates for Enbrel ''significantly'' from
her current estimate of $125 million in 1999.
Chovav, who has a ''buy'' rating on the stock, also said she
plans to raise her earnings-per-share estimates and her price
target for the Immunex ''shortly.''
The filing ''implies that the company expects to sell at
least $250 million of Enbrel in 1999,'' Chovav said in a report
issued this afternoon. ''This is significantly higher than our
current estimate.''
Immunex officials declined comment on the stock's activity,
though they did say the company is pleased with early sales.
''The launch of Enbrel has gone exceedingly well,'' said Tim
Warner, a spokesman for the company.
Still, the purchase commitments are an indication of company
expectations, rather than actual Enbrel sales, said Scott Sacane,
an analyst with NationsBanc Montgomery Securities.
''We really haven't heard anything specific in regards to
launch numbers'' for Enbrel, Sacane said.
Sacane has a ''sell'' rating on Immunex' stock because he
thinks the expectations for its sales potential are overly high.
''The good news now is we don't have to wait long (to see)
how much they can sell,'' Sacane said.
Shares in Immunex have risen from a 52-week low of 49 7/8 in
early October -- about a month before the drug was cleared for
sale -- to today's year-long high of 91 7/8.
Analysts have said in the past that Enbrel's annual peak
sales could top $1 billion. Even by the most conservative of
sales estimates, Enbrel would bring in more than eight times the
revenue seen last year from all of the company's seven drugs,
which include the cancer treatment Novantrone.
Enbrel will initially compete with older drugs and Hoechst
AG's Arava, an oral treatment recently approved to slow the
progression of rheumatoid arthritis.
Centocor Inc., a biotechnology company with three products
on the market, is also seeking approval to market its Crohn's
disease drug Remicade as a rheumatoid-arthritis treatment.
--Kristin Reed in Washington (202) 624-1858 with reporting by |
