Shares of two major biotech companies moved up Monday, despite the announcement late Friday afternoon that their drug Rituxan, for non-Hodgkin's lymphoma, poses an increased risk for hepatitis B in some patients.
co-market the drug, which has been on the U.S. market since late 1997.
The news about Rituxan was offset by analyst upgrades -- Genentech on Friday and Biogen Idec on Monday. Shares of Genentech inched up 14 cents, or 0.3%, to $47.39 on Monday; shares of Biogen Idec advanced $1.30, or 2.2%, to $60.25.
The Food and Drug Administration announced after the markets had closed Friday that the companies have notified health care providers of changes in the drug's warning label on the basis of reports that the drug caused hepatitis, liver failure and "death in some patients."
The FDA notice said that people with a high risk of hepatitis B infection should be screened before receiving Rituxan. Carriers of the disease "should be closely monitored" for hepatitis during the Rituxan treatment and for several months after the Rituxan therapy, the FDA said.
Hepatitis B is a chronic viral infection that may lead to cirrhosis of the liver or liver cancer. The virus can remain dormant, and research indicates that Rituxan can lead to a reactivation of the virus. Such reactivations can happen spontaneously, or they can be triggered by chemotherapy.
The FDA notification follows a July 12 letter sent by the companies to physicians, alerting them about changes in Rituxan's label due to further research on the drug's effects. The letter said the median time that patients contracted hepatitis was four months after therapy commenced and one month after the last dose was administered. Rituxan drug is usually given with a standard chemotherapy drug.
The companies say doctors should halt giving Rituxan and chemo to any patients who develops hepatitis. "There are insufficient data regarding the resumption of Rituxan therapy" in patients who develop hepatitis.
Separately, on Friday, Credit Suisse First Boston raised it rating on Genentech to outperform from neutral. Mark E. Augustine said he was encouraged that the company's colon cancer drug Avastin showed promise in clinical trials as a treatment for lung cancer, pancreatic cancer and kidney cancer. He said he based his upgrade on test results and "positive clinician buzz." He raised his target price to $65 from $60. He doesn't own shares; his firm has an investment banking relationship with Genentech.
Biogen Idec benefited from an upgrade from Lehman Brothers on Monday as Craig C. Parker elevated his rating to overweight from equal weight. Parker said he acted because he believes that Antegren, an experimental drug for multiple sclerosis, will get approval from the Food and Drug Administration with a label allowing broad coverage for the disease. He raised his price target to $76 from $54. He doesn't own shares; his firm has an investment banking relationship with Biogen Idec.