NEW YORK ( TheStreet) -- Shares of Puma Biotechnology (PBYI) are almost tripling after the company reported positive data for its breast cancer drug, while an analyst at Citigroup said that the company would probably become a takeover target.
WHAT'S NEW: Puma last night announced that its breast cancer drug, neratinib, had met its primary endpoint in a Phase III trial. Specifically, patients who received the drug demonstrated a 33% improvement in disease-free survival versus placebo, the company said. The results were statistically significant, Puma added. Puma said it would file for regulatory approval of neratinib in the first half of 2015.
ANALYST REACTION: In a note to investors earlier today, Citigroup analyst Yaron Werber wrote that he expects the company to be acquired in the wake of the data. The data represents a best-case scenario, and there is an 85% chance that the drug will be approved, the analyst stated. Neratinib should generate peak sales of at least $4.1B, according to Werber. He hiked his price target on the shares to $292 from $99 and kept a Buy rating on the stock. Another analyst, Howard Liang of Leerink, similarly called the ExteNET trial outcome a "best case scenario" for the company. Liang said a positive outcome for the trial was not a complete surprise, but that its results are among the better outcomes for adjuvant studies of FDA-approved agents, which should give the drug a good chance of getting FDA approval. The firm sees the full range of strategic options on the table for Puma, including a potential acquisition, Liang wrote. The analyst increased his price target on the stock to $300 from $144 following the trial news and keeps its Outperform rating on the stock. A third research firm, UBS, raised its price target on Puma Biotechnology to $325 from $125 this morning, stating that the neratinib data suggests the opportunity for the drug is much greater than it had previously modeled. UBS, which added that it sees little downside risk to the remaining trials of the drug, keeps its Buy rating on the shares.
PRICE ACTION: In early trading, Puma jumped $159, or 269%, to $218.Reporting by Larry Ramer and Jason Keil.