|Cardiome shares surge on positive heart drug data|
Monday July 14, 12:09 pm ET
Cardiome Pharma shares jump as oral drug reduces relapse of abnormal heart rhythm in study
NEW YORK (AP) -- Shares of Cardiome Pharma Corp. surged Monday after the company said the oral version of its developing abnormal heart rhythm drug vernakalant reduced the relapse rate for patients in a midstage study.
The Canadian drug developer said a 500-milligram dose of vernakalant cut the relapse time for patients to more than 90 days in the midstage study, compared with just 27 days for patients taking placebo.
Cardiome stock jumped $2.18, or 26 percent, to $10.52 in midday trading. Shares have traded in a 52-week range of $5.78 to $12.62.
More than 2 million Americans have an abnormal heart rhythm condition, according to the American Heart Association. The condition puts people at a higher risk for blood clots and stroke.
The results come as the company continues to weigh its future in an ongoing strategic review, which could result in a partnership or a possible sale.
Cardiome plans to move ahead with a late-stage study on the 500-milligram dose. Meanwhile, it is still waiting for a Food and Drug Administration decision on an intravenous version of the drug, called Kynapid.
"With 949 patients and subjects exposed to vernakalant (oral) in this development program, we now have an extensive safety and efficacy dataset to guide us as we move this exciting clinical program forward and finalize our strategic discussions with interested parties," said Bob Rieder, chairman and chief executive, in a statement.
Wall Street mostly expected positive results from the midstage study, based on prior interim data. Several analysts also expect the announcement to boost the company's bargaining power. In March, Cardiome retained Merrill Lynch as its financial adviser to pursue partnerships or a possible sale of the company, and noted it has received interest from other drug makers about vernakalant opportunities.
"Management has previously indicated they expect to announce the final outcome from the strategic review within a couple of weeks after releasing today's final oral data as all potential partners/acquirors have completed their due diligence," wrote RBC Capital Markets analyst Philippa Flint in a note to investors. "Since the data were consistent with previously announced interim data, we believe that all that is likely left to do is to finalize the price of any potential deal."
Flint reaffirmed a "Outperform" rating on the stock.
Meanwhile, Oppenheimer & Co. analyst Bret Holley reaffirmed a "Outperform" rating on the stock, saying the likelihood of a buyout is now higher.
Lehman Brothers analyst Dr. Charles Birchenough took a more cautious view Monday, reaffirming a "Equal Weight" rating as the company continues to wait for an FDA decision on Kynapid as it undergoes the strategic review.
"Focus now rotates to Kynapid (intravenous) approval and completion of strategic options review and we believe a delay in both creates significant overhang on Cardiome shares," he wrote in a note to investors.