Regeneron shares slip on halt to cancer study

Regeneron Pharmaceuticals shares fall following early end to pancreatic cancer study

• On 11:24 am EDT, Monday September 14, 2009

NEW YORK (AP) -- Shares of Regeneron Pharmaceuticals fell Monday, following the company's announcement that it stopped a late-stage study of the cancer drug candidate aflibercept because it was not working much better than a placebo.

Late Friday, Regeneron and partner Sanofi-Aventis said an interim analysis of the drug in a pancreatic cancer study showed patients were not surviving significantly longer than the those in the placebo group.

Shares of Regeneron fell $1, or 4.6 percent, to $20.88 in morning trading. The stock has traded between $11.81 and $24 over the past 52 weeks. Sanofi-Aventis stock gained 43 cents to $35.48.

Paris-based Sanofi-Aventis and Tarrytown, N.Y.-based Regeneron, are also running late-stage tests of aflibercept as a primary treatment for prostate cancer, and as secondary treatments for colon cancer and non-small cell lung cancer. All the trials combine aflibercept with chemotherapy.

Robert W. Baird analyst Christopher J. Raymond reaffirmed a "Neutral" rating and $22 price target, saying the failure is not surprising, given another key cancer drug's difficulties in reaching pancreatic cancer treatment goals. Specifically, he cited Genentech's Avastin, which is approved to treat colon, lung, breast, and renal cancer. Genentech is now part of Roche.

"Still, full data will likely be needed to allay investor concern relative to aflibercept's safety compared to Avastin," Raymond said, in a note to investors. "But, with key value drivers unaffected, we may look to get more constructive here in the case of an overreaction on the downside."

He said Regeneron's key value drivers, which include potential indications in other types of cancer, are unaffected.

Meanwhile, Regeneron said it has completed enrollment in late-stage studies of its VEGF Trap-Eye treatment for age-related macular degeneration. The company is developing the drug in partnership with Bayer and compare the developing treatment with Genentech's Lucentis.

Merriman Curhan Ford analyst Joe Pantginis reaffirmed his "Buy" rating for Regeneron, saying he expects the VEGF late-stage study to produce positive results.

"Investors should be building positions now based on the anticipated very data rich year in 2010 from the company's three lead products," he said, referring to aflibercept for cancer, VEGF, and a potential gout treatment.

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