J.P. Zaragoza's  Instablog

J.P. Zaragoza
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DVM, biotech tech transfer specialist for over 5 years.
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Iber Biotech Stock Notes
  • Brief note on Ariad Pharma going into ASH meeting 4 comments
    Nov 3, 2011 8:58 AM | about stocks: ARIA
    Ariad Pharmaceuticals’ $1.5bn market cap is mainly driven by two drugs in advanced clinical stages: ridaloforimus for soft tissue and bone sarcoma and ponatinib for chronic myeloid leukemia (NYSE:CML) and Philadelphia positive acute lymphoblastic leukemia (Ph+ ALL). The former is partnered with Merck and presented top-line results of the phase III SUCCEED trial early this year. Merck is now on track to file an NDA later this year. Ariad also announced on August 18 that the EMA had accepted the MAA of the drug.
    However, the closest catalyst for Ariad is interim data from phase II PACE trial that will be presented at the American Society of Haematology meeting on December 10 - 13. Abstracts of these posters will be available as early as November 7. Ponatinib is a pan BCR-ABL TyK inhibitor for the treatment of patients resistant or intolerant to desatinib or nilotinib or those who carry the T315I mutation of BCR-ABL for whom no treatment exists. Only 2-3% of the patients develop the T315I mutation.
     The lead drug in the CML space is Novartis’ imatinib, which generated sales of $4bn in 2009 and faces two problems: increasing resistance and patent expiration in 2015. Some patients just do not respond to imatinib therapy, while an additional 10-15% of patients who do respond, end up developing a resistance in the first 5 years following the beginning of treatment. For these patients, Bristol-Mayers’ desatinib and Novartis’ nilotinib were developed and approved in 2006 and 2007 respectively.
    According to different sources, the general CML market could reach a peak in sales of $9bn by 2015 whereas niche indications such as drugs targeting resistance to TyK inhibitors may get to $900m and the more specific T315I mutation market could reach $500m.
    Conclusion: taking into account Ariad’s most developed compounds, their potential market and the disclosed terms of the partnership agreement with Merck, one can easily conclude that the current market cap of $1.5bn does not bear the commercial potential of both drugs. Whereas positive results from the PACE phase II trial at ASH may send the stock higher, we can expect a likely sell-off at some point between Nov 7 and the ASH meeting that may continue over the next few months.
    Stocks: ARIA
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Comments (4)
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  • pslice84
    , contributor
    Comments (323) | Send Message
    Nice story Juan.


    Ponatinib is a really exciting opportunity for them and likely undervalued. Interim read out will be very robust because of how fast they were able to enroll patients; a lot of interest.


    Concerns long-term :


    (a) for Rida to sell, theyre gonna need some OS advantage.


    (b) CML market is sticky. Even though Sprycel and Tasigna have shown stat superiority over Imanitib, Imanitib still sells much more than either. Plus, it goes generic in 2015, so cost will become more of an issue in CML since insurers will want people on Imanitib first before other TKI's.
    3 Nov 2011, 09:07 AM Reply Like
  • J.P. Zaragoza
    , contributor
    Comments (189) | Send Message
    Author’s reply » Thanks for your comment and good points, pslice. I am confident it'll report positive results at the ASH meeting and there are good prospects that ponatinib will capture a big portion of the market of those patients that have the T315I mutation. The question becomes, how can Aria get the most of this small market? by increasing the drug's price it'll have to deal with reimbursement issues, and with the economic situation we're in, this may become a big hurdle.
    4 Nov 2011, 08:36 AM Reply Like
  • carsons7
    , contributor
    Comments (140) | Send Message
    J.P. Ariad will start a head to head first line trial with Pona in the middle of 2012. This has a much bigger market potential for Ariad that just the T315I mutation. CML is a condition of the aged, and as the baby boomers age, more occurrences will develop, and more individuals will develop the mutation. The real prize is '113 for NSCLC, while still way way too early, preliminary safety results and early efficacy will be known in the middle of 2012. '113 has proven to be 10X more powerful than Criz from PFE for NSCLC with targeted mutations that Criz can't treat..
    4 Nov 2011, 06:47 PM Reply Like
  • Steven Breazzano
    , contributor
    Comments (359) | Send Message
    The PACE trial enrolled extremely quickly and ahead of schedule (doesn't happen very often in oncology!) as well. I'm not sure if that means the potential market is as big/bigger than expected, but it is a positive for ARIA.
    7 Nov 2011, 10:10 AM Reply Like
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