Ariad CEO Strikes Back, Insists Leukemia Drug Is Fine

Ariad Pharmaceuticals ( ARIA) CEO Harvey Berger, sounding defiant, even angry at times, convened a marathon conference call Thursday to refute concerns about the safety and early commercial launch of the company's leukemia drug Iclusig.

Berger took special aim at Ariad critic Favus Institutional Research, calling a negative report on Iclusig released Wednesday, "incomplete and replete with misinformation, innuendo and false conclusions."

Through the first 12 weeks of its U.S. commercial launch, "more than" 325 chronic myeloid leukemia (CLM) patients are paying for Iclusig treatment, with additional, undisclosed number of patients receiving some free drug, Ariad said.

The new disclosure led investors and analysts on the call scurrying to their Excel spreadsheets, trying to estimate first quarter sales. Ariad could have made it easy on everyone by simply pre-announcing Iclusig sales but the company chose not to.

Analyst consensus for first-quarter Iclusig sales was $4 million prior to Thursday's call, although the "whisper number" based on existing prescription data is more like $5-6 million.

I spoke with one institutional investor with no position in Ariad who now estimates Iclusig sales for the quarter will be $3.5 million to $5 million, depending on the conversion rate of patients from free drug to paid prescriptions.

"If you're really bullish on Iclusig, why not pre-announce first-quarter Iclusig sales?" asks another investor who is short Ariad and isn't covering following Thursday's call. "What I heard on the call was 90 minutes of Harvey babbling and contradicting himself."

On his call, Berger insisted Iclusig is well received by doctors and patients and that concerns about the drug's toxicity were overblown. The rate and type of side effects being reported are not different from what was seen in clinical trials or what's contained in the drug's FDA-approved label, he said.

Iclusig's label includes a black box warning against blood clots causing fatal heart attacks and strokes, and liver toxicity including liver failure and death.

The Favus research note negative on Iclusig published Wednesday refers to a survey of doctors treating CML patients with the drug who are finding it to be more toxic and less tolerable than expected. "Iclusig has a very small role to play in heavily pre-treated CML patients with the T315I mutation (extremely rare); as time goes on, that observation is becoming obvious," the Favus note said.

Ariad insists Iclusig will be used broadly in all types of CML patients. The company is conducting a study comparing Iclusig to Novartis' ( NVS) Gleevec in newly diagnosted CML patients.

Ariad shares rose 3% to $17.27 in early Thursday trading, which is still down from $22 in mid-March . The bull-bear fight over Iclusig seems far from over.

-- Reported by Adam Feuerstein in Boston.

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