Survival Data Still Key for Medarex

The Pfizer Effect

One shadow casting doubt on investors' minds: On April 2, Pfizer (PFE Quote) halted a phase III study of melanoma drug tremelimumab after an interim review concluded that the drug would not prolong survival any more than currently prescribed chemotherapy.

Medarex shares fell about 8% the first trading day after that news. The problem is that Pfizer's tremelimumab and Medarex and Bristol's ipilimumab are designed to work in similar ways by blocking a cell receptor called CTLA-4 and essentially activating the body's immune system to seek out and destroy cancer cells

The abstract for the phase III tremelimumab trial isn't available until May 31, so comparison with ipilimumab isn't yet possible, noted Elliott in his note to investors Friday.

Looking ahead, some Wall Street analysts are optimistic about ipilimumab's potential. Earlier this week, Needham & Co. analyst Mark Monane upgraded the stock to buy from hold, citing among other things the upcoming presentations on ipilimumab as a possible catalyst for the stock.

Medarex also released abstracts for additional programs in prostate cancer among others, but analysts viewed these as immaterial.

Investor frustration over the past six months is evident in the stock, which has given up more than 35% since the company announced in December the phase II ilimumab study didn't meet its primary endpoint. But no news seemed to be good news for shares Friday, as the stock ended the session up 4.7% at $8.13.

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ASCO Thursday night released thousands of research abstracts on its Web site, www.asco.org. For a useful guide on searching through the abstracts, check out Adam Feuerstein's ASCO Abstract Preview.

And for abstract reviews on Genentech (DNA Quote) and Eli Lilly (LLY Quote), check out these related articles:

• Genentech's Avastin Passes Colon Cancer Safety Check
• Eli Lilly's Alimta Shows Promise in Cancer Study