Will Healthy Lab Data Revive Ailing Cell Genesys?

Slipping And Sliding
Cell genesys (CEGE ) is in the midst of clinical trials of vaccines for prostate and pancreatic cancer that analysts believe should catch investors' eyes. But Cell's stock has been in a downspin since its high of 6.24 on Sept. 5. "There is a disconnect between the stock and Cell's fundamentals, which remain solid and on track toward two potential product filings," says Pamela Bassett of Cantor Fitzgerald, who rates the stock, now at 3.07, a buy. Bassett, whose 12-month target for the stock is 12, says the "32-month survival data" on Phase II trials of its GVAX pancreatic vaccine was "positive." She also expects Cell to provide favorable interim data at the next American Society of Clinical Oncology Gastrointestinal Cancers Symposium in June. Data on Cell's GVAX prostate vaccine, in Phase III trials, will also be presented. Mark Monane of Needham, who also rates the stock a buy, says Cell is seeking to team up with big drugmakers on both. The prostate cancer vaccine has won a fast-track designation from the Food & Drug Administration, and Cell expects to provide three-year trial results in 2009. "We're encouraged by the Phase II data we've seen," he says.

Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

By Gene G. Marcial

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