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Medivation, Bristol-Myers Emerge as Winners After Big Cancer Meeting

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Ariad Pharmaceuticals, Array BioPharma, and others also present encouraging study data at ASCO.

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MINYANVILLE ORIGINAL Investors should have a more positive outlook for Medivation (MDVN) and Bristol-Myers Squibb (BMY) following a major cancer meeting wrapping up Tuesday in Chicago.

Picking winners and losers for the American Society of Clinical Oncology's annual meeting, or ASCO, can be tricky. Doctors may disagree on study data, investors can overreact to some news, and stocks aren't always going to immediately reflect gains made at the giant medical meeting. A number of companies remain status quo following the event, which features thousands of scientific presentations for cancer drug research.

But clearly Bristol-Myers surprised and impressed with its presentation of an early-stage drug that shows promise in lung, kidney, and skin cancers. (See Johnson & Johnson, Bristol-Myers' Cancer Drugs Grab Spotlight.) Bristol-Myers was up slightly Tuesday to $33.73. The shares are down 4% this year.

"While this weekend's ASCO Meeting was full of oncology advances, we think Bristol-Myers' (drug study) garnered the most interest given its benefit in multiple tumor types," Credit Suisse analyst Catherine Arnold says.

The experimental drug is an antibody that helps boost the body's immune system by blocking a protein known as PD-1. The early success points to a potentially promising payoff for an acquisition that Bristol-Myers pulled off three years ago when it bought biotech company Medarex for a little more than $2 billion. That acquisition also hauled in the drug Yervoy, approved for treatment of melanoma last year. The experimental drug's positive study results give new hope for proponents of immunotherapies, which use the body's immune system to fight cancer.

Medivation benefitted from Johnson & Johnson's (JNJ) presentation that showed its drug Zytiga appeared to work well in prostate cancer. Medivation is seeking US approval to sell a similar drug, enzalutamide, a treatment shown to extend patients' lives in a company study. Medivation is viewed by many in the medical and investment communities as a superior drug to both Zytiga and the prostate cancer vaccine marketed by Dendreon (DNDN). Medivation's pivotal research has been public and the company went into the ASCO meeting from a position of strength. Medivation exited the conference just as strong.

"The clinical profile is very attractive," Medivation Vice President of Medical Affairs Hank Mansbach says.

Zytiga is approved for men who already received chemotherapy, and J&J is studying the drug in pre-chemo patients so it can market the treatment for that use, too. Research presented this weekend showed Zytiga worked effectively in men in the earlier stages of the disease but the study failed to show a statistically significant survival advantage. Even if this survival benefit question hinders J&J's chance of winning US approval for the additional use, the company may succeed in convincing some doctors to prescribe the drug "off-label" for pre-chemo patients.

Mitchell Steiner, CEO of prostate cancer drug developer GTx (GTXI), says he believes Medivation will be the winner among the trio of new treatments that include Zytiga (approved last year) and Provenge (approved in 2010). Steiner, a urologist, says that Medivation's safety and effectiveness will win out with doctors. Specifically, he predicts that more urologists (who treat patients in the early stages of the disease) will use Medivation because of the safety and efficacy profile and also for its ease of use. Medivation and J&J drugs are pills, while Dendreon's Provenge is infused. Zytiga is taken with the steroid prednisone, which has its own side effects.

Dendreon has had a hard time convincing urologists to use its drug, a challenge that the company continues to address, Chief Medical Officer Mark Frohlich says.

Given the momentum seen with drugs developed by Medivation and J&J, Dendreon appears to be at least a short-term loser following ASCO.

In trading midday Tuesday, Medivation rose about 1% to $82.10 and J&J fell slightly to $62.12. Dendreon recovered a bit from a sell-off Monday, rising 10% to $6.51 Tuesday. The stock dropped 84% over the past year.

Elsewhere, at the conference:

Ariad Pharmaceuticals (ARIA) showed that its experimental drug ponatinib was effective in treating patients with a type of leukemia who resisted medicines made by Bristol-Myers and Novartis (NVS). Ariad expects to file for approval of its drug as a secondary treatment for chronic myeloid leukemia sometime in the third quarter.

Stifel Nicolaus analyst Joel Sendek predicts the drug will be approved by early 2013. If Ariad can win additional uses for the drug, the product can top $600 million in sales by 2016, Sendek says.

Ariad shares rose 3% to $16.12 Tuesday and are up by almost a third this year.

AstraZeneca (AZN) reported promising results from a lung cancer drug it licensed from Array BioPharma (ARRY). The drug taken with chemo helped patients live longer and slowed cancer growth. Array fell 4% Tuesday to $3.25. The stock is up more than 50% this year.

GlaxoSmithKline (GSK) reported success with targeted drugs aimed at genetic mutations associated with melanoma.

Aveo Pharmaceuticals (AVEO) and partner Astellas announced plans for another clinical trial to show the benefits of treating kidney cancer patients with the experimental drug tivozanib. The trial will compare Aveo's drug with Pfizer's (PFE) Sutent as a first-line treatment for advanced renal cell carcinoma.

Twitter: @brettchase

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