March 1 (Bloomberg) -- Pharmacyclics Inc., the developer of blood cancer treatments with Johnson & Johnson, rose as much as 10 percent today ahead of a delayed investor conference call scheduled later this month.
The shares rose $1.43 or 5.7 percent, to $26.62 at 3:21 p.m., in Nasdaq trading in New York, after earlier climbing as high as $27.69. The shares, which more than doubled during 2011, are trading at their highest since November 2001.
The March call is expected to provide more details about the drug, known as PCI-32765.
“Pharmacyclics is on a positive trend and it’s on our ‘Best’ list,” Gregory Wade, an analyst at Wedbush Securities Inc. in San Francisco, said in a telephone interview. “Investors are coming to appreciate its potential. The company is expected to update the street in the first half of March on its clinical development plans for 32765 on an important call.”
Shares of the Sunnyvale, California-based company have doubled since mid-December, after a dip following the Dec. 8 announcement that Johnson & Johnson agreed to pay as much as $975 million for Pharmacyclics’ experimental compound.
The two companies will split profits and share costs of developing the drug now being evaluated in first- and second-stage trials. Three stages of clinical trials generally are required for U.S. marketing approval.
“The drug’s efficacy has been unbelievably good, stunning really, based on the level of response to mono-therapy in patients with advanced malignancies and this is achieved with an absence of toxicity,” Wade said. “It’s a $2 billion global opportunity for the drug and Pharmacyclics owns half of that. There is a very strong likelihood of success in Phase III trials.”
Pharmacyclics and Johnson & Johnson’s partnership focuses on an oral treatment for non-Hodgkin’s lymphoma, chronic lymphocytic leukemia and multiple myeloma, all of which are considered hematological malignancies, Pharmacyclics said in a statement last month. The two companies will also collaborate and develop other therapies and treatments for cancer.
Pharmacyclics “has maintained 50 percent ownership of a drug with a partner that has global clinical and commercial development reach in a deal structured so they won’t have to access the equity capital markets to contribute their portion of the development costs,” Wade said. “These characteristics may not have been fully appreciated by investors after the deal was announced in December.”
Wade rates the stock “outperform” with a target of $25, “which the company has now exceeded,” he said.
Earlier this month, Jason Kantor, an analyst with RBC Capital Markets in San Francisco, upgraded his rating on Pharmacyclics to “outperform” after a downgrade in December following the partnership announcement.
“We expect to hold our investor call within the next two weeks,” said a spokesman for Pharmacyclics, who declined to be named because the final date for the call has yet to be confirmed.
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