PropThink: ArQule Setback Increases Risk and Discount Rates for Forward Revenue
(Thomson Reuters ONE) -
ArQule Inc (NASDAQ:ARQL), co-developer of the tivantinib cancer treatment,
received word from its Japanese partner Kyowa Hakko Kirin Co., that Kyowa has
suspended patient enrollment in Asian trials due to safety concerns. An
independent Safety Review Committee (SRC) suspects that the drug, which is in
Phase III testing for non-small cell lung cancer (NSCLC), could be causing
interstitial lung disease (ILD) in trial subjects. There has been an imbalance
in cases of ILD in the two arms of the ATTENTION study (tivantinib vs. placebo).
Patients already undergoing treatment will continue with the trial until further
review can be completed. The same trial in the West (U.S., Canada, and
Australia), called MARQUEE, has not revealed safety issues and already completed
recruitment. Management guides for interim data by year's end, with data from
ATTENTION in 2013. ArQule develops the product with Daiichi Sankyo (OTC:DSNKY)
in the U.S.
Shares declined in early trading by 25% and should fluctuate around $5 until
ArQule releases further data. If tivantinib proves to have similar issues of ILD
in the MARQUEE trial, per the concerns of the SRC, chances of continued
development as a lung cancer treatment are small. In January, ArQule reported
that the drug met its primary endpoint of extending time to progression in a
Phase 2 trial against Hepatocellular Carcinoma (HCC), a cancer of the liver.
Shares at the time rose accordingly and set a new 52-week high over $8 and
ArQule is now preparing for a Phase 3 trial for HCC. With a strong balance sheet
and consistent R&D revenue over the last two years, ArQule can handle some
setbacks as long as its lead candidate continues in trials. It is notable
that in Japan the patient population in the ATTENTION trial does have existing
predisposition to ILD. Some analysts are defending the stock because there has
not been an imbalance in the MARQUEE trial to date, but due to the new potential
risk of ILD, some are increasing their discount rate. Target prices remain
around $10, but the downside risks are strong enough to stay away from ARQL
until safety concerns are resolved.
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Source: PropThink via Thomson Reuters ONE
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Datum: 29.08.2012 - 17:44 Uhr
Sprache: Deutsch
News-ID 178820
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