Mon, Aug 26, 2013 - Page 13 News List

New cancer drug boosts PharmaEngine

By Kevin Chen  /  Staff reporter

High hopes for PharmaEngine Inc’s (智擎生技) new drug for pancreatic cancer have sent the company’s shares rising 3.65 percent over the past week and 12.43 percent over the past month, with a Fubon analyst forecasting the Taipei-based company would see robust growth in earnings next year.

In her latest report, issued earlier last week, Fubon Securities Investment Services Co (富邦投顧) analyst Heather Chang (張雅雯) said PharmaEngine’s earnings per share (EPS) could surge to NT$21.47 next year, from this year’s forecast of NT$0.6, thanks to the anticipated sales contribution of new pancreatic cancer drug MM398.

The biopharmaceutical company is expected to receive US$75 million from the US-based Merrimack Pharmaceuticals Inc next year before MM398 can be sold on the market, and another US$130 million in milestone payments over the next three years if sales of the drug can reach certain targets, Chang said.

After that, PharmaEngine would likely receive royalty fees from the drug sales based on a licensing deal it signed with Merrimack two years ago for the development and commercialization of MM398 worldwide, with the exception of Taiwan.

“PharmaEngine is likely to gain royalty revenue of between NT$1.4 billion and NT$1.8 billion [US$47 million and US$60 million] if sales of MM398 hit US$1 billion, which is expected to contribute NT$14 to NT$18 to the company’s EPS,” Chang said on Monday last week.

Shares of PharmaEngine closed at NT$199 on the GRETAI Securities Market on Friday, up 6.42 percent from the previous session and the highest level in more than five months.

MM398 is presently undergoing phase-three clinical trials.

PharmaEngine said on Aug. 13 that the drug is likely to complete the third stage of clinical trials by the end of this year and hit the US, European and Taiwanese markets in September next year after obtaining drug permits.

PharmaEngine spokesman Peter Wu (吳兆升) said the company received US$15 million from Merrimack after they reached the licensing deal in May 2011 for US$220 million. The drug patent of MM398 will last until 2025, he said.

The market for pancreatic cancer drugs is about US$9 million a year in the US, according to an estimate by JPMorgan & Chase Bank.

Last week, Merrimack published its phase-two study results of the drug in the British Journal of Cancer, showing that 75 percent of patients surviving at least three months, with 25 percent reaching the one-year mark.

Pancreatic cancer is almost uniformly fatal, with a 73 percent death rate within one year of diagnosis, according to statistics compiled by the American Cancer Society. It has a five-year overall survival rate of about 6 percent in the US, based on the data from the National Cancer Institute.

Merrimack said in a press release on Thursday that its phase-two study showed median overall survival was 5.2 months, with 50 percent of patients presenting evidence of disease control. It expects the phase-three study to complete patient enrollment in the third quarter of this year.

“The speed of enrollment is faster than expected, suggesting promising results against pancreatic cancer,” Chang said in her report, adding that the US company is likely to release its phase-three study results by the end of the year.

Once the US Food and Drug Administration approves the sale of the drug in the US next year, it is expected to become an effective therapy option for patients with pancreatic cancer after gemcitabine has failed, significantly boosting PharmaEngine’s revenue and earnings, she said.

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