Aug. 21 (Bloomberg) -- Astex Pharmaceuticals Inc. rose the most in almost seven months on expectations that the developer of experimental cancer drugs will receive regulatory approval this quarter from Europe for its leukemia treatment.
Astex surged 15.4 percent to $2.77 at the close in New York, the most since Jan. 27. The shares of the Dublin, California-based company have risen 47 percent this year.
“They’ve had a good run, really a great run since the middle of May,” George Zavoico, an analyst with McNicoll Lewis & Vlak LLC in New York, said in an interview. He has a buy rating on Astex, with a target price of $3.50.
Last month, Astex said Janssen-Cilag International NV, which licenses its treatment outside the U.S., Canada and Mexico, was notified that the Committee for Medical Products for Human Use of the European Medicines Agency backed recommending approval. The drug, called Dacogen for Injection, is used to treat older adults suffering from acute myeloid leukemia.
The final regulatory decision is expected in the end of the third quarter, Astex said in a statement July 20. If approved, Dacogen would receive 10 years of market exclusivity in the European Union and Astex would earn “a milestone payment” of $5 million, the company said in an earnings statement July 30.
Astex also reported Dacogen second-quarter royalty revenue increased 25 percent to $14.4 million from $11.5 million a year earlier.
“Since their pipeline is still early stage, investors tend to focus on Dacogen royalties, and they did have a good quarter,” Zavoico said.
The stock gain “is a combination of continued strength in Dacogen sales, royalty revenue rising in second-quarter year over year even though it was down from the first quarter as expected due to the annual rest, and anticipated approval from the EU this quarter,” he said.
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