Shares of Ariad Pharmaceuticals Inc., a developer of cancer drugs, sank the most in more than four years Friday after the company’s cancer medicine received a warning label with U.S. approval to treat two rare types of leukemia.
Ariad dropped 21 percent to $18.93 at the close in New York, the biggest single-day decline since October 2008. The shares of the Cambridge, Massachusetts-based company had almost doubled this year through yesterday.
The once-daily medicine, called Iclusig, was approved three months ahead of schedule. It treats adults with chronic myeloid leukemia and Philadelphia chromosome positive acute lymphoblastic leukemia, two rare blood and bone marrow diseases, the Food and Drug Administration said today in a statement. The drug will carry a warning on its informational materials, called a black box, about dangers of liver toxicity and arterial thrombosis, or blood clotting.
“Investors were surprised and disappointed by the presence of a black box warning,” Phil Nadeau, an analyst with Cowen & Co. in New York, wrote in a research note Friday. He said investors are worried the warning will limit the drug’s use, concerns he said may be overblown given physicians’ opinions that Iclusig is “very well-tolerated.”
Iclusig is the third treatment for chronic myeloid leukemia and second for acute lymphoblastic leukemia approved this year, the FDA said. Those drugs are Pfizer Inc.’s Bosulif, Teva Pharmaceutical Industries Ltd.’s Synribo and Talon Therapeutics Inc.’s Marqibo. Ariad’s therapy, previously known by its chemical name ponatinib, was cleared for patients whose leukemia is resistant or intolerant to a class of drugs called tyrosine kinase inhibitors.
“I’m convinced we will successfully launch ponatinib and take on large pharma competitors,” Harvey Berger, Ariad’s chief executive officer, said in a Dec. 4 interview. “Because everyone working on ponatinib’s commercialization is working on that and only that. They know ponatinib will make a difference.”
The company has targeted $600 million to $800 million in annual sales by 2017 to 2018, Berger said. That assumes the medicine goes on the market at the beginning of 2013, he said.
Iclusig works by blocking certain proteins that promote the development of cancerous cells, the FDA said. It targets chronic myeloid leukemia cells that have the particularly tricky mutation known as T315I that makes cells resistant to currently approved tyrosine kinase inhibitors.
“The approval of Iclusig is important because it provides a treatment option to patients with CML who are not responding to other drugs, particularly those with the T315I mutation who have had few therapeutic options” Richard Pazdur, director of the Office of Hematology and Oncology Products in FDA’s Center for Drug Evaluation and Research, said in the statement.
Tyrosine kinase inhibitors include Bristol-Myers Squibb Co.’s Sprycel and Novartis AG’s Tasigna.
In a clinical trial where all 449 patients with various phases of the leukemias took Iclusig, 54 percent of all patients and 70 percent of those with the T315I mutation responded to the drug, the FDA said.
“While we are disappointed by the safety elements of the label, we are not changing estimates,” Nadeau said. “While understandable, we think today’s weakness is overdone and would use it as a buying opportunity in Ariad.”
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