Cell Therapeutics' stock takes off on positive phase 1 data; Cubist's stock up again on Theravance news

By Sheri Kasprzak

New York, Aug. 23 - Cell Therapeutics, Inc. led biotech action on Wednesday as its stock skyrocketed on positive phase 1 data from a clinical trial of Xyotax, its drug for the treatment of esophageal or gastric cancer.

The stock jumped Wednesday by 22.31%, or 29 cents, to settle the session at $1.59, gaining another 5 cents in after-hours trading.

"This is really important news for them," said one sellside market source of Cell Therapeutics. "They don't have anything out there right now and this could be the one that really makes or breaks them. And I think it will make them."

Volume of the company's shares traded Wednesday soared as well, with 9,741,234 shares traded compared to the average 660,051 shares.

"It's time to buy in while the price is still under $2," said the sellsider.

There was also enthusiasm - but a note of caution - from a trader in the convertibles market.

"I'll just point out that this is phase 1 data, which is 11 of 12 patients or something like that," the trader said. "That being the case, if this was a phase 3 trial or a phase 2, which is a larger trial, if you get that kind of response, then you'd see people really running for these things [Cell Therapeutics stock]."

The trader said that while the news was positive, it is still in the early stages of development and has a ways to go before reaching the market.

"The bonds should go up, but should they trade a lot and a lot of people running out to buy these things?" the trader said. "The answer is no."

In the study, 21 patients were treated with Xyotax and of the 12, four patients or 33% achieved a complete response, while seven patients or 58% achieved a partial response, meaning a 50% or greater shrinkage of their tumor.

"Xyotax is an important new radiation sensitizer in esophageal cancer," said Howard Safran, a principal investigator of the study, in a statement. "Pre-clinically, Xyotax is a much more potent sensitizer than paclitaxel. Xyotax may replace paclitaxel as the most important radiation sensitizer in solid tumors."

"The safety profile of Xyotax and its protocol-defined dose with standard course radiation coupled with its impressive anti-tumor activity provide clinical support for pre-clinical studies demonstrating its great potency as a radiosensitizer," said Jack Singer, the company's chief medical officer, in a news release. "A follow-on study in combination with cisplatin and radiation is currently in progress."

Seattle-based Cell Therapeutics develops treatments for cancer.

Cubist's stock jumps again

Cubist Pharmaceuticals, Inc. watched its stock jump for the second-straight session following phase 3 clinical data from Theravance, Inc.

According to phase 3 trials on Theravance's telavancin for skin and skin structure infections, the product is not superior to Cubist's Cubicin product used for skin infections.

"It's like a free endorsement for Cubicin," said one sellside market source. "Investors are buying in now."

Cubist's stock advanced by 7.5% or $1.67 on Wednesday to close at $23.93 (Nasdaq: CBST). On Tuesday evening, when Theravance announced the results of the trial, the stock climbed by a penny to close at $22.26.

On Wednesday, Theravance's stock slipped by 1.11%, or 28 cents, to end at $25.00 (Nasdaq: THRX). On Tuesday, the stock fell by 12 cents to close at $25.28.

In the trials, telavancin showed a 90.6% cure rate against vancomycin's 86.4% cure rate. Vancomycin is Eli Lilly Inc.'s comparable product.

Also, telavancin showed a microbiological eradication rate of 89.9% versus 85.4% against vancomycin.

Headquartered in South San Francisco, Calif., Theravance develops and commercializes therapeutic products to treat respiratory diseases, bacterial infections and gastrointestinal dysfunctions.

Teva's stock dips on plant sale

Elsewhere, Teva Pharmaceutical Industries Ltd.'s stock slipped on Tuesday after the company announced it will close its manufacturing facility in Cidra, Puerto Rico.

The stock fell by 33 cents, or 0.95%, to settle at $34.30, but gained another 3 cents in after-hours trading (Nasdaq: TEVA).

The move, according to a statement released by Teva on Wednesday, is part of the company's strategy to cut costs after acquiring Ivax Corp.

The former Ivax facility in Cidra had employed 550 people and manufactured 50 products.

The move will result in about $45 million in savings in 2007, according to the Teva statement.

The closure will not impact Teva's manufacturing plant in Puerto Rico.

Located in Jerusalem, Teva develops human and animal pharmaceutical products and pharmaceutical ingredients.

Advanced Cell's stock leaps 357%

Advanced Cell Technology, Inc. watched its stock skyrocket by 357.5% on Wednesday after successfully generating human embryonic stem cells using an approach that does not harm embryos.

The stock jumped by $1.43 to close a $1.83 (OTCBB: ACTC).

The technique derives stem cells from human blastomeres with a single-cell biopsy technique, according to an Advanced Cell statement from Wednesday morning.

Separately, the company announced its plans to close an $11,295,000 private placement of convertible debentures on Tuesday.

When that offering was announced, the stock gained 53.26%, or 14 cents, to close at $0.40.

Volume of the company's stock traded also climbed with 8,756,230 shares traded, compared to the average 95,460.

On Tuesday morning, the company announced its plans to sell three-year debentures, which will be convertible into common shares at a price that will be based upon market conditions.

Based in Alameda, Calif., Advanced Cell uses stem cell technology in the field of regenerative medicine.

Depomed, King to launch Glumetza

Depomed, Inc. and King Pharmaceuticals, Inc. announced Wednesday that they will launch Glumetza to treat patients with type 2 diabetes.

On word of the news, Depomed's stock gained 2.82%, or 12 cents, to close at $4.37 (Nasdaq: DEPO). The stock gained 2 cents in after-hours trading.

King's stock fell 7 cents, or 0.43%, to end at $16.19 (NYSE: KG).

The news comes as the American Diabetes Association recommended that treatment with metformin, which is used in Glumetza, be initiated in the treatment of type 2 diabetes.

"These new guidelines were created to define a clear pathway of treatment when physicians are managing diabetes, given the many new and existing therapeutic options and combinations available," said John Fara, Depomed's CEO, in a statement.

"The ADA's recommendation to start treating diabetic patients with metformin at the point of diagnosis prioritizes this agent as a first line of defense in controlling hyperglycemia. In addition, it recognizes that, unfortunately, most people with type 2 diabetes fail to achieve or maintain their metabolic goals utilizing lifestyle interventions alone.

"Depomed applauds the ADA's move to address this problem with a recommendation for more aggressive treatment to quickly get glycemic levels under control in order to lessen the long-term health complications and costs associated with this disease."

Depomed, based in Menlo Park, Calif., is a drug delivery technology company. King, located in Bristol, Tenn., develops a wide range of pharmaceuticals.

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