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Barry Cohen
Barry Cohen
Articles (226) 

Mirati Shares Hit Record High on Cancer Study Results

Company's drug for gene defects seems to be more effective than similar treatment from Amgen

October 27, 2020 | About:

Promising results from a study of its cancer drug pushed Mirati Therapeutics Inc. (NASDAQ:MRTX) to an all-time high Monday. Shares of the San Diego-based biotech hit more than $210 and are at about $205 on Tuesday. Meanwhile, the stock of rival Amgen Inc. (NASDAQ:AMGN) slid to a four-month low before closing at just under $225.

Mirati and Amgen are in a race to find which of the companies' drugs work best in treating defects in the gene called KRAS. KRAS mutations are found in many lung, colorectal and pancreatic cancers, and the lack of an approved therapy designed to attack mutant KRAS signaling means tumors positive for the mutation are often difficult to treat, according to an article in Biopharma Dive.

The surge in Mirati shares is tied to data the company released at a cancer therapeutics conference Sunday. It shows that the Mirati drug adagrasib to treat cancer tumors with the mutation outperformed the Amgen treatment sotorasib. Analysts were quick to respond.

"Simply put, Mirati now appears to have the edge with this data set and a planned NDA (New Drug Application) filing in 2021," Credit Suisse's Evan Seigerman said in a note to clients. Credit Suisse rates Murati stock Outperform. SVB Leerink analyst Andrew Berens bumped up his target price on Mirati shares to $195 from $134 and rated the stock outperform.

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Adagrasib is potentially "best-in-class," wrote Goldman Sachs analyst Salveen Richter, who raised her price target to $267 from $152, according to Bloomberg. She thinks yearly sales of the drug could hit $3.4 billion in lung cancer either by itself or in combination with other medicines. Meanwhile, JonesTrading analysts jumped on the bandwagon, raising their target to a Wall Street high of $300.

Mizuho Securities analyst Salim Syed is less sanguine. He told clients the data "wasn't super clean…and there are still questions that remain."

Safety differences between the two drugs could tip the balance. The data suggest Amgen may have an edge over Mirati in terms of safety and tolerability. " Compared to sotorasib, adagrasib had a higher rate of serious treatment-related adverse events," analysts at SVB Leerink wrote in a note to investors.

Monday's results are a first pass at determining whether Mirati's therapy can perform as well as Amgen's medication, studies of which have shown it is helpful in about half the patients who have lung cancer. However, with results from so few patients right now it's difficult to determine which drug is more effective, according to Pasi Jänne, director of the Lowe Center for Thoracic Oncology at the Dana-Farber Cancer Institute and paid consultant for Mirati.

"Once more patients are enrolled in the two companies' studies, I think you can make comparisons," said Pasi Jänne, director of the Lowe Center for Thoracic Oncology at the Dana-Farber Cancer Institute, and also a paid consultant for Mirati.

"But I think it's encouraging that both agents are showing clinical activity for a disease where we have not had targeted therapies before," she added.

Disclosure: The author has a position in Amgen.

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About the author:

Barry Cohen
Barry Cohen has nearly 40 years experience in communications and marketing, the majority in senior positions at large international health care companies, including Abbott Laboratories and Bayer Inc.

He has contributed to a number of financial websites, writing primarily about the stocks of health care companies.

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