15:54 T =Immunex Stock -2: Reimbursement Environment Looks Positive
NEW YORK (Dow Jones)--Immunex Corp. (IMNX) shares soared 14% Thursday, a move analysts attributed to a short squeeze and enthusiasm about the company's recently launched arthritis drug Enbrel.
Industry observers said short sellers are trying to cover their positions prior to the initial release Monday of Enbrel prescription data.
"It appears we have a short squeeze going on," said Lehman Brothers Inc. analyst Matthew Murray.
Kurt Von Emster, a portfolio manger for Franklin Global Healthcare Fund, agreed. "It doesn't take much to get a stock moving up when people get scared," he said.
Murray said Lehman is telling clients that Immunex has a rather large short position. The company's short position was 3.1 million shares as of Oct. 26, up 50% from 2 million shares on Sept. 24, Murray said.
Immunex has about 40 million shares outstanding.
The stock increase follows the Food and Drug Administration's approval early this month of Enbrel for rheumatoid arthritis, one of the most severe forms of arthritis. The high-priced drug, touted as an effective treatment with few side effects, is being co-marketed by Immunex and American Home Products Corp. (AHP).
The stock surge also follows last week's American College of Rheumatology meeting in San Diego, where a number of pharmaceutical firms, including Immunex, presented data on arthritis treatments.
Deutsche Bank Securities analysts Alex To said doctors attending the meeting were "very enthusiastic" about Enbrel.
"Any suggestions that Enbrel may dominate over competing therapies in the near-term is sufficient to produce this kind of (stock) showing," said Mehta Partners analyst Akhtar Samad.
Von Emster said Immunex is already seeing Medicare reimbursements for Enbrel, a good sign that reimbursement might not be a hindrance to product sales. "I think the initial uptake of the drug is going to go fairly strong," he said.
(MORE) DOW JONES NEWS 11-19-98
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