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The likelihood of a sell-the-news event after a biotech releases new data seems to be directly linked to the run-up a biotech has experienced going into the release. So it shouldn't come as much of a shock that Ariad Pharmaceuticals (Nasdaq: ARIA ) sold off 8.2% yesterday following the release of the abstract for its leukemia treatment ponatinib to be presented at the American Society of Hematology annual meeting next month. The biotech was up 135% this year going into yesterday.
Because, frankly, the data looks pretty good.
Ariad is going after patients that have failed Otsuka's and Bristol-Myers Squibb's (NYSE: BMY ) Sprycel or Novartis' (NYSE: NVS ) Tasigna, or have a mutation that doesn't allow them to be treated with those drugs. Of the chronic phase patients who had been assessed three months after starting ponatinib, 42% of patients resistant or intolerant to Sprycel or Tasigna responded to the drug. Patients with the mutation fared even better, with 57% responding.
The phase 2 trial was a single-arm, open-label trial, which means that all the patients got ponatinib and doctors and their patients knew they got the drug. While double-blinded trials comparing a drug candidate with standard therapy or placebo is the best way to tell if a drug works, it's hard to imagine that around half of the patients would start to improve on their own. These are sick patients with few options, after all.
In fact, this phase 2 trial should be enough to gain Food and Drug Administration approval given the unmet need. Seattle Genetics' (Nasdaq: SGEN ) Adcetris was approved with just phase 2 data for the same reason.
If the full readout of the trial, which is expected in the first half of next year, produces the same solid results at six months, Ariad shouldn't have any problems getting the drug approved.