Sign No. 1 that ridaforolimus isn't that important to ARIAD Pharmaceuticals
Sign No. 2: Shares are actually up today after the committee voted 13 to 1 recommending against approval of the drug that's being developed in conjunction with Merck
Imagine what would have happened if the panel of outside experts had actually signed off on using ridaforolimus like they did with GlaxoSmithKline's
So, what's supporting ARIAD's $2.5 billion market cap? The biotech has another cancer drug, ponatinib, which seems to be working pretty well in leukemia patients. The drug promoted a response in about half of the patients who had failed Otsuka and Bristol-Myers Squibb's
Getting in the market is critical, but sales aren't going to be that great as a second-line treatment -- or even a third-line treatment since patients are often treated with Novartis' Gleevec before Sprycel. In order to approach the levels that Gleevec has achieved -- $4.6 billion last year -- ARIAD will have to show that ponatinib can work in newly diagnosed patients.
The FDA has the final say with ridaforolimus, but after the lopsided recommendation, I have a hard time seeing anything but a rejection coming around June 5. Ironically the American Society of Clinical Oncology meeting, where we might get some more data on ponatinib, runs June 1-5. Is there any doubt which event investors will be focused on?