Immunomedics

(IMMU) - Get Report

denied Friday that clinical trials of an experimental cancer drug were shut down after a patient died.

"No clinical trials sponsored by Immunomedics have been halted because of adverse events or deaths," CEO David Goldenberg said in a press release. The company said it continued to enroll patients in early-stage trials of yttrium-90-LymphoCide, and that its LymphoCide pivotal trials were on schedule.

The stock rose 88 cents, or 3.9%, to $23.85 at midday.

Updated from 8:37 p.m. EDT Sept. 14

:

Immunomedics Drug Trial Shut Down After Patient Death

A clinical trial of an

Immunomedics

(IMMU) - Get Report

experimental cancer drug was shut down after a patient died, according to an analyst who spoke with the company.

The drug, which employs a radioactive substance to fight cancer, was in early-stage clinical trials at the

Garden State Cancer Center

, according to Stefan Loren, analyst with

Legg Mason Wood Walker

. The trial of the drug ended in the last several weeks, although the company hasn't publicly discussed the matter, said Loren.

Repeated phone calls for confirmation to Morris Plains, N.J.-based Immunomedics weren't returned. A spokesman for the Garden State Cancer Center declined questions and referred calls to Immunomedics. David Goldenberg, president of Garden State Cancer Center, is also chairman and chief executive of Immunomedics. Loren said he spoke with Goldenberg yesterday.

Shares in Immunomedics closed up 38 cents at $22.75 Thursday, giving it a market value of $1.1 billion. The stock, which traded for barely $1 a year ago, rose 40-fold this spring as biotech stocks took off, and has since held much of that value as investors speculate on the promise of the company's development efforts and its attempts to find a partner.

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Little to Go On

It isn't clear whether the drug was the cause of the patient death and information about the patient hasn't been released. Typically in questionable patient deaths, however, the

Food and Drug Administration

shuts down experimental drug trials while an assessment is made. Clinical trials of the drug were partly funded by the

National Cancer Institute

, an NCI spokeswoman said.

Active
Immunomedics stock well above year-ago levels

Source: BigCharts

Cancellation of a clinical trial program, particularly if a patient death occurs, often causes abrupt declines in the market capitalization of smaller drug companies, since those valuations are usually based on the prospects for drugs in development rather than actual sales. It can also affect the prospects for experimental classes of drugs, such as those Immunomedics is testing. Similar cancer drugs are under development at

IDEC Pharmaceuticals

( IDPH) and

Coulter

(CLTR)

.

Immunomedics is testing a number of experimental cancer drugs both with and without radioactive substances. Its most advanced drug, LymphoCide for non-Hodgkin's lymphoma, is entering phase three, or late-stage clinical trials. A less advanced version of the drug, which uses a radioactive substance called 90-yttrium, is in earlier-stage trials. The company is also testing another drug called Cea-side in colorectal, breast and lung cancer, both with and without "y-90," the radioactive substance.

Radioactive?

Loren, who rates the company a strong buy, said it was one of the radioactive drug trials that was halted, but that the $1.1 billion market value of the company mostly rests on the value of the advanced, nonradioactive version of LymphoCide. Legg Mason does no corporate finance work for Immunomedics, which reported a loss of $10 million on sales of $6 million for the year ended in June.

Immunomedics has said it's seeking a corporate partner to further develop and market LymphoCide, a factor that could further determine the company's ultimate value, said Loren.

"The fundamental value of the company will be determined when they get a deal for LymphoCide, and who it is with and how much funding they will get," said Loren.

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