Trial Results Give Healthy Boost to Drug Maker

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Last week’s results of a late-stage clinical trial for its cancer drug sent shares of Puma Biotechnology Inc. into the stratosphere.

The stock price of the Westwood pharmaceutical firm skyrocketed 264 percent during the week ended July 23 to close at $233.43. All of the movement came on the last day, after the test results were revealed, making the company the biggest gainer on the LABJ Stock Index. (See Page 68.)

Puma reported July 22 that patients who participated in a Phase III clinical trial of its drug neratinib had a disease-free survival rate 33 percent higher than those who were given a placebo. The test involved more than 2,800 patients in 41 countries. The company’s chief executive believes these results show that neratinib is not only an effective breast cancer treatment, but that it prevents recurrence of the disease as well.

“There remains an unmet clinical need for further improvements and outcome in order to attempt to further reduce this risk of recurrence,” Puma Chief Executive Alan Auerbach said in a conference call discussing the results. “We believe that the results of the study demonstrate that we may be able to provide this type of improvement with neratinib in order to further help the patients with this disease.”

The company’s development of neratinib is focused on the drug’s potential as a treatment for breast cancer patients, but Puma says the drug might also be able to treat cancers of the lungs and other organs.

But its outstanding performance in treating breast cancer is what excited investors.

“The magnitude of benefits is among best-case scenarios that could be envisioned,” wrote Howard Liang, an analyst who covers the company for Boston investment bank Leerink Swann in a July 23 report on the company.

Puma plans to file for regulatory approval of neratinib in the first half of next year. The company did not respond to a request for comment.

The successful test makes Puma a prime candidate for acquisition, especially given its chief executive’s track record. Auerbach sold a previous company, Cougar Biotechnology Inc., to New Brunswick, N.J., health care giant Johnson & Johnson in 2009 for $1 billion.

After the jump in Puma’s stock price, Auerbach’s estimated net worth based on his holdings of the company jumped to $1.3 billion, making him one of the wealthiest people in Los Angeles.

Boston hedge fund Adage Capital Partners was the other big winner from the clinical trial results. The company owns about 5.7 million shares of Puma, which brought it almost $1 billion in paper profits since trading opened July 23.

Staff reporter Andrew Edwards contributed to this article.

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