ASCO Pops and Drops

The American Society of Clinical Oncology (ASCO) meeting produced plenty of data over the weekend, which typically leads to big moves of small cancer companies on the following Monday. This year didn't disappoint.

Company

Price Increase (Decrease) on June 6

OncoGenex Pharmaceuticals

1.2%

OXiGENE (Nasdaq: OXGN  )

7.5%

Pharmacyclics

2.5%

Incyte (Nasdaq: INCY  )

2.4%

RXi Pharmaceuticals

(8.5%)

Neoprobe

(10.6%)

YM BioSciences (AMEX: YMI  )

(10.1%)

Agenus

(11.4%)

Sunesis Pharmaceuticals

(17.9%)

Exelixis (Nasdaq: EXEL  )

(20.2%)

Cyclacel Pharmaceuticals (Nasdaq: CYCC  )

(9.9%)

Nektar Therapeutics

(9.5%)

Source: Capital IQ, a division of Standard & Poor's.

The pops
OxiGENE is really the only true pop, but keep in mind that it has a market cap of only $40 million or so. Investors may be more excited about the prospects of its thyroid, lung, and ovarian cancer drug, Zybrestat, than they were a few days ago, but they're still not giving it all that much value.

It's sad when a 1% or 2% jump is considered a pop, but that's the best I could find. Some companies run up into ASCO, so stellar data really can't do much to help the companies out. OncoGenex, for instance, was up 17% from when abstracts were released until when the conference started.

When flat is a win
Some companies have more to lose than win when presenting at ASCO. Ariad Pharmaceuticals (Nasdaq: ARIA  ) was up $0.02 yesterday after the company presented the full data for its sarcoma drug, ridaforolimus. Ariad and partner Merck (NYSE: MRK  ) had already announced that the trial was positive, so the full data was more likely to hurt the company -- if analysts found something surprising -- than help. Looks like investors were content with the current data, which shows a 2.2-month increase in overall survival.

What goes up ...
The hard crash after ASCO often results from investors selling the news, rather than any data that lowers a drug's approvability or sales potential.

There certainly didn't seem to be anything wrong with YM BioSciences' data for CYT387. In an early-stage trial, the drug was able to reduce enlarged spleens in 46% of myelofibrosis patients. More importantly, CYT387 appears to be treating the anemia associated with myelofibrosis.

Investors may be fretting about Incyte's data for its myelofibrosis drug, ruxolitinib. Incyte's drug is further along; the company just submitted the marketing application to the FDA. Ruxolitinib's substantial lead means CYT387 needs to produce substantially better phase 3 data in order to dethrone ruxolitinib.

Exelixis got crushed yesterday, but that seems to be a bit of an overreaction, since shares are bouncing back nicely today. Six deaths in trials testing cabozantinib had investors a little spooked. But cancer drugs are given a little more leeway when it comes to side effects, since cancer patients will die if they're not treated. A few deaths, even if they're attributable to the drug, aren't likely to keep the drug off the market.

The efficacy will be the driving force for an approval. So far, the phase 2 data in both ovarian and prostate cancer looks pretty good.

Exelixis still has to run phase 3 trials to confirm the results. And maybe that's the rub. Cabozantinib is a little behind the curve, especially in prostate cancer treatment, which is getting fairly crowded. But that's not a new issue, so I don't understand why it would cause investors to hit the sell button.

Until next year
Biotech is already a volatile sector and ASCO only makes it worse. It's tempting to just recommend not holding any biotech through ASCO, although you'd miss the OXiGENE of next year by doing that.

Whether you hold or not, there seem to be plenty of options to pick up post-ASCO bargains. Use the comments section below to let us know if you find any.

Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Exelixis. Motley Fool newsletter services have recommended buying shares of Exelixis. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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