By Bill Berkrot
NEW YORK, May 22 (Reuters) - Oncogenex Pharmaceuticals Inc shares soared more then 34 percent and other tiny cancer drug developer stocks rose as investors bet they will become takeover targets after Johnson & Johnson said it would buy another small biotechnology company.
Poniard Pharmaceuticals Inc and Medivation Inc shares also enjoyed double-digit percentage gains on Friday.
Healthcare conglomerate J&J said late Thursday it planned to buy cancer drug developer Cougar Biotechnology Inc for about $930 million, setting off further speculation that large drugmakers were trolling for biotech bargains, especially in oncology.
Oncogenex, which is developing a promising prostate cancer treatment, saw its shares hit a multiyear high. Shares of Poniard, which is developing a platinum base chemotherapy that appears to be less toxic than currently available similar treatments, rose as much as 18.3 percent.
'That has a lot to do with Cougar,' said David Martin, an analyst with Toronto-based Dundee Securities Corp, adding that Oncogenex recently released impressive data from a mid-stage study of its prostate cancer drug.
Shares of Cougar competitor Medivation gained as much as 15.2 percent Friday.
'We believe J&J's acquisition of Cougar will bring the spotlight on MDV3100, which will enter Phase III studies in hormone-refractory prostate cancer shortly,' Wedbush analyst Kimberly Lee said of Medivation's experimental cancer drug.
Cash strapped biotechs are hoping to grab a share of the spotlight and the attention of potential partners when they unveil data next week in Orlando at the American Society of Clinical Oncology (ASCO) meeting, the year's most important cancer meeting.
Rodman & Renshaw analyst Simos Simeonidis believes that big pharmaceutical buyout activity in small- and mid-cap biotechs is far from over and mentioned both Poniard and Oncogenex as potential targets.
Given the modest 16 percent premium J&J has offered for Cougar, Simeonidis believes other suitors could emerge for that company as well.
'I think Poniard is on a lot of big pharma radar screens,' Simeonidis said, adding that he is surprised that Oncogenex has been flying under the radar for so long.
He noted the impressive survival benefit seen in a Phase II prostate cancer trial from a summary of data released last week. Full details from the Oncogenex study will be presented at ASCO.
'The Oncogenex drug is ahead of Cougar,' Simeonidis said. 'Oncogenex has shown overall survival benefit. Cougar has only shown a PSA response, but no survival benefit.'
He called the 10-month median overall survival benefit over standard chemotherapy seen in the Phase II Oncogenex study 'a very significant difference.'
Canaccord Adams analyst George Farmer said J&J's willingness to snap up Cougar ahead of Phase III data would likely spur investor interest in a lot of other small oncology companies.
Oncogenex shares closed up $4.77, or 28.7 percent, at $21.42 on the Nasdaq after climbing as high as $22.40 earlier in the day. Poniard shares closed up 44 cents, or 12 percent, at $4.11 after hitting $4.34 earlier, while Medivation shares ended up $2.53, or 12 percent, at $23.69 also on Nasdaq.
(Reporting by Bill Berkrot; editing by Gunna Dickson and Matthew Lewis) Keywords: ONCOGENEX PONIARD/ (bill.berkrot@thomsonreuters.com; +1 646 223-6030; Reuters Messaging: bill.berkrot.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
NEW YORK, May 22 (Reuters) - Oncogenex Pharmaceuticals Inc shares soared more then 34 percent and other tiny cancer drug developer stocks rose as investors bet they will become takeover targets after Johnson & Johnson said it would buy another small biotechnology company.
Poniard Pharmaceuticals Inc and Medivation Inc shares also enjoyed double-digit percentage gains on Friday.
Healthcare conglomerate J&J said late Thursday it planned to buy cancer drug developer Cougar Biotechnology Inc for about $930 million, setting off further speculation that large drugmakers were trolling for biotech bargains, especially in oncology.
Oncogenex, which is developing a promising prostate cancer treatment, saw its shares hit a multiyear high. Shares of Poniard, which is developing a platinum base chemotherapy that appears to be less toxic than currently available similar treatments, rose as much as 18.3 percent.
'That has a lot to do with Cougar,' said David Martin, an analyst with Toronto-based Dundee Securities Corp, adding that Oncogenex recently released impressive data from a mid-stage study of its prostate cancer drug.
Shares of Cougar competitor Medivation gained as much as 15.2 percent Friday.
'We believe J&J's acquisition of Cougar will bring the spotlight on MDV3100, which will enter Phase III studies in hormone-refractory prostate cancer shortly,' Wedbush analyst Kimberly Lee said of Medivation's experimental cancer drug.
Cash strapped biotechs are hoping to grab a share of the spotlight and the attention of potential partners when they unveil data next week in Orlando at the American Society of Clinical Oncology (ASCO) meeting, the year's most important cancer meeting.
Rodman & Renshaw analyst Simos Simeonidis believes that big pharmaceutical buyout activity in small- and mid-cap biotechs is far from over and mentioned both Poniard and Oncogenex as potential targets.
Given the modest 16 percent premium J&J has offered for Cougar, Simeonidis believes other suitors could emerge for that company as well.
'I think Poniard is on a lot of big pharma radar screens,' Simeonidis said, adding that he is surprised that Oncogenex has been flying under the radar for so long.
He noted the impressive survival benefit seen in a Phase II prostate cancer trial from a summary of data released last week. Full details from the Oncogenex study will be presented at ASCO.
'The Oncogenex drug is ahead of Cougar,' Simeonidis said. 'Oncogenex has shown overall survival benefit. Cougar has only shown a PSA response, but no survival benefit.'
He called the 10-month median overall survival benefit over standard chemotherapy seen in the Phase II Oncogenex study 'a very significant difference.'
Canaccord Adams analyst George Farmer said J&J's willingness to snap up Cougar ahead of Phase III data would likely spur investor interest in a lot of other small oncology companies.
Oncogenex shares closed up $4.77, or 28.7 percent, at $21.42 on the Nasdaq after climbing as high as $22.40 earlier in the day. Poniard shares closed up 44 cents, or 12 percent, at $4.11 after hitting $4.34 earlier, while Medivation shares ended up $2.53, or 12 percent, at $23.69 also on Nasdaq.
(Reporting by Bill Berkrot; editing by Gunna Dickson and Matthew Lewis) Keywords: ONCOGENEX PONIARD/ (bill.berkrot@thomsonreuters.com; +1 646 223-6030; Reuters Messaging: bill.berkrot.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.