Amgen stock jumped Wednesday after outperforming expectations in a lung-cancer study. It brought rival Mirati Therapeutics along for the ride.
Amgen tested its drug, Lumakras, in patients with previously treated non small-cell lung cancer, a common form of the disease. Amgen's Lumakras beat out chemotherapy, lengthening the amount of time before patients' cancer worsened.
"This update is an important one for Amgen, removing a meaningful overhang on the stock due to some investor skepticism, though we always saw (study) success as likely based on our deep dive/statistical analysis," UBS analyst Colin Bristow said in a report to clients.
On today's stock market, Amgen stock advanced 0.5% to 240.30. Shares of Mirati climbed 8.7% to 81.03.
Amgen Stock: Targeting An Aberrant Protein
Amgen's Lumakras and Mirati's adagrasib block an aberrant protein created by the KRAS gene. This mutation occurs in 13% of patients with non small-cell lung cancer and 1%-3% of patients with colon and other cancers, Amgen says.
Patients in Amgen's study all have confirmed mutations in their KRAS gene. In 345 patients previously treated with chemotherapy or a checkpoint inhibitor, Lumakras lengthened the amount of time before their cancer progressed, Amgen said Wednesday. Checkpoint inhibitors, like Merck's Keytruda, teach the immune system to find cancer by focusing on specific proteins.
Amgen was tight-lipped otherwise. But the results are promising for both Amgen stock and Mirati. Amgen will unveil additional details during the European Society for Medical Oncology meeting next month in Paris.
Lumakras has an accelerated approval to treat previously treated patients with non small-cell lung cancer. But the approval is contingent upon further testing. Mirati's adagrasib is in testing for the same use.
Gaps Up
Bristow, the UBS analyst, says this is clearly a "positive update" for Amgen stock. He expects Lumakras to lengthen the amount of time before patients' cancer worsens by six to seven months. Chemotherapy has shown an incremental benefit of 1.5 months.
"If Lumakras' absolute benefit is less than two months, the perceived utility of (the approach) in non small-cell lung cancer may be questioned," he said. He noted the drug carries a higher cost than chemo, which is the standard treatment.
Bristow has a neutral rating on Amgen stock and a 248 price target.
Amgen stock gapped higher on the news, though it remains below its 50-day moving average, according to MarketSmith.com. Mirati stock is in a similar position. Investors tend to look at Amgen's data as a possible read-through to the potential for Mirati's rival drug.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
