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the result can be considered a statistical fluke.
The survival data that appeared in the abstract was current as of December, but has been updated for the June 6 presentation, Berger says. The new batch of data will be current through April, meaning doctors had five more months of follow-up time to record more deaths, so statisticians can run more robust calculations on how the drug did versus the placebo. Berger wouldn’t say how many total deaths will be reported on at ASCO, only that it will be “more than 313.”
What’s important is that the study hit its main goal on progression-free survival in a way that was statistically convincing, and that benchmark appeared to be predictive of an improvement in survival times, Berger says. “This is exactly the kind of data we wanted to see, and expected to see,” he says.
Merck plans to submit an application later this year to the FDA for approval to start marketing the drug in the U.S., so it’s possible the treatment could be cleared for sale in 2012. If approved, the Ariad drug would be the second mTOR inhibitor approved by the FDA, after Novartis’ everolimus (Afinitor) for kidney cancer.
Merck is picking up the tab for development costs and the commercial push for the Ariad drug, and has agreed to pay Ariad “substantial, tiered double-digit royalties” on worldwide sales, Berger says. If the drug does well in its initial group of patients, you can bet there will be more interest in testing it out against other tumor types, an effort that’s already well underway at Merck. Analysts at the ASCO meeting will be taking the temperature of physician enthusiasm, and penciling out their sales models accordingly, to help them extrapolate where Ariad’s valuation is headed from here.
One other Ariad drug, ponatinib, will also have a lesser role to play at this year’s ASCO. Data on that treatment for chronic myeloid leukemia is still in the early stages, but some analysts consider that to be more of a future driver of Ariad’s value than ridaforolimus. Analyst Eun Yang of Jefferies & Co. has noted that ponatinib could generate $205 million in U.S. sales by 2017, while Ariad’s cut of royalties from Merck’s sales of ridaforolimus could bring in about $72 million that year.
Berger wouldn’t say which one he thinks is more valuable to the company, but that both are critical to the company’s plan to grow from an R&D-only shop into a diversified company that also markets its own products.
“By the end of next year, I expect Ariad will have two drugs on the market which were internally discovered and developed,” Berger says. “Not many companies can say that.”