INDIANAPOLIS (AP) – A potential cancer treatment being developed by the biotechnology company Oncothyreon Inc. should yield positive early results from a late-stage study to be released later this year, according to a Wedbush analyst.
Analyst Gregory Wade said in a research note that Wall Street appears to be pricing a greater likelihood of success for the drug, called Stimuvax, into Oncothyreon’s shares.
The Seattle company’s shares have more than doubled in price since closing at $3.22 on March 1.
Oncothyreon is developing Stimuvax, a lung cancer treatment, with the German drug maker Merck KGaA.
Merck said it was dropping approval bids for the multiple sclerosis drug Cladribine based on responses from the U.S. Food and Drug Administration and following similar feedback from regulators in Europe. Merck said answering regulators’ requirements would require new clinical trials lasting several years with no guarantee of approval.
WBB Securities analyst Steve Brozak said investors may be relieved because Merck did not mention Stimuvax while it shut down the other drug program.
“The absence of news is good news,” he said.
Wade said Oncothyreon’s stock price could climb as high as $30 following a positive analysis of the early trial data. He also said shares could fall to between $7 and $9 if the company doesn’t announce that the trial is being stopped because of the drug’s effectiveness.
But even then, he said in the note that he would see a buying opportunity “as we continue to anticipate there is a high likelihood for success.”
Wade raised his 12-month price target on Oncothyreon to $15 from $7 and repeated his “Outperform” rating for the shares.
Date: June 23, 2011
Source: Associated Press
Filed Under: Drug Discovery