Eli Lilly & Co.’s experimental stomach cancer drug helped patients with advanced disease live longer, a study found. The shares rose.
The most common side effects for the medicine, called ramucirumab, were high blood pressure, diarrhea and headache, the Indianapolis-based company said in a statement today. The drug was tested in patients with gastric cancer that has spread to other parts of the body.
Leerink Swann upgraded its rating on the stock to buy from hold on the data, saying the drug has an 80 percent chance of approval as a second-line treatment. The medicine is in the final stage of testing for U.S regulatory approval. If approved, it may generate $600 million in annual sales, said Mark Schoenebaum, a New York-based analyst with ISI Group.
“Overall, the Street will view this positively, we think, as it adds credence to the pipeline thesis,” Schoenebaum said, in a note to clients. He said it will also make Lilly less dependent in the future on its experimental Alzheimer’s drug.
Lilly rose 4.1 percent to $52.53 at the close of New York trading. The shares have jump 37 percent in the past 12 months. Dyax Corp, which has a partnership on the treatment, rose 18 percent to $2.82.
Leerink analyst Seamus Fernandez said in a report today that Lilly could hit $59 to $60 a share based on his positive outlook for the drug.
Lilly didn’t say how much greater the survival benefit was. Full results from the research will be presented at a future medical meeting, the drugmaker said.
Ramucirumab is among the products obtained by Lilly from its $6.5 billion acquisition of ImClone Systems Inc. in 2008. Lilly has five other late-stage studies of ramucirumab in four tumor types, including breast and lung cancer. If approved for all indications in testing, the drug could have $1.6 billion in sales by 2020, Fernandez said.
More than 21,000 people will be diagnosed with stomach cancer in the U.S. in 2012 and 10,540 people will die of the disease, according to the National Cancer Institute.