Upbeat Sales Outlook Lifts San Diego Drug Maker’s Stock
Idec Pharmaceuticals Corp. shares rose 6.7% amid signs that sales of its only product, the cancer drug Rituxan, may be better than expected, allowing the biotechnology company to beat earnings estimates.
Idec shares rose $2.81 to close at $45 on Nasdaq.
Shares in San Diego-based Idec, one of an elite group of about a dozen biotech companies with products already on the market, have more than doubled over the past two months. They’ve soared amid signs that Rituxan, a bioengineered drug for non-Hodgkin’s lymphoma, is being used to treat a broader spectrum of patients than the ones for which it won U.S. approval--patients with relapsed and certain late-stage forms of the disease.
“The drug is actually being moved further up into the treatment regimen,” to include patients with early forms of the fatal disease as well as use with traditional chemotherapy agents, said Eric Ende, a Lehman Brothers Inc. analyst.
While the drug has won U.S. Food and Drug Administration approval for use as a single agent, which is given in four doses, some physicians are using it as part of a six-dose chemotherapy regimen, which boosts sales of the drug 50% per patient, Ende said.
Ende, who has an “outperform” recommendation on Idec shares and a price target of $59 a share, yesterday raised his forecasts for Rituxan sales and Idec earnings for the coming two years.
He raised his fourth-quarter earnings forecast to 7 cents a share from 5 cents. That’s higher than the 2-cent-a-share average of analysts polled by First Call Corp.
Idec spokeswoman Connie Matsui said the company may beat the 2-cent earnings consensus, citing strong Rituxan sales. She said expenses may be lower than forecast during the quarter because clinical trial costs may be lower than anticipated--it’s taken longer than expected to sign up patients for a late-stage trial of the next-generation version of Rituxan.
“There’s that potential” for earnings to beat the forecast, Matsui said. “It depends on whether these trends continue.”
Ende raised his forecast for 1999 earnings to $1.11 a share from 85 cents and for 2000 earnings to $1.67 from $1.42.
Rituxan was the first cancer treatment approved in the U.S. among a class of bioengineered drugs known as monoclonal antibodies. The drug was designed to attack only the cancerous cells, not healthy cells that also are harmed by chemotherapy agents.
About half of the 240,000 Americans with non-Hodgkin’s lymphoma have the low-grade or follicular type, which is treatable but incurable. The traditionally used chemotherapy regimen for the disease has been shown to allow the average patient to live six to seven years after diagnosis.
Rituxan was co-developed by Genentech Inc., a biotechnology company majority owned by Swiss drugmaker Roche Holdings AG.
