Market Likes Millennium’s Velcade News; Analysts Not So Sure

9/18/07

Shares of Millennium Pharmaceuticals (NASDAQ: MLNM) got an early morning boost on news that the Cambridge-based biotech has gotten good results in a Phase 3 trial of its cancer drug, Velcade, and plans to seek a new FDA approval for the drug.

First approved to much fanfare in 2003 for treating multiple myeloma patients for whom other treatments have failed, Velcade is currently Millennium’s only marketed product. (The drug has since gained FDA approval for treating certain lymphoma patients as well.) The trial announced today was aimed at proving the drug’s efficacy as a first-line treatment for newly diagnosed multiple myeloma patients; patients receiving the drug in the study were doing so well that researchers stopped the trial early so that those in the control group could begin taking Velcade too.

In an announcement before the start of trading this morning, Millennium said the new approval it’s seeking for the drug—which showed U.S. sales of $220.5 million in 2006—would “would double the number of patients eligible to receive the benefit of Velcade.” Shares of the firm’s stock opened at $10.58, up over 8 percent from yesterday’s close of $9.77. Analysts seem to be less sanguine about the news, however, pointing out in media reports that to capture the market for first-line treatment of multiple myeloma Velcade will have to prove itself superior to already-approved combination regimens—and some observers deem that unlikely.

That seemed to have tempered the stock’s strong start, but in mid-afternoon trading Millennium was still up nearly 5 percent at $10.23.

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