Second Look: Medarex tumbles after drug application delay
NEW YORK—Shares of Medarex fell to a fresh annual low Monday morning after the biotechnology company said that the application for its cancer drug candidate will be delayed into next year.
Shares of the Princeton, N.J., company lost 59 cents, or 7.4 percent, to $7.42. Earlier in the session, shares hit a 52-week low of $7.12.
After the close of trading Friday, the company said the Food and Drug Administration's request for more data on its drug candidate ipilimumab, currently in late-stage studies, will delay its application for approval into next year.
Medarex is partnered with Bristol-Myers Squibb Co. in developing the drug, which is aimed at treating advanced metastatic melanoma, a fatal form of skin cancer. The FDA has the companies asked for additional overall survival data.
In a note to investors, Banc of America Securities analyst Katherine S. Kim slashed her 2009 earnings forecast for Medarex by 12 cents per share to $1.10 to account for lost revenue from potential ipilimumab sales.
However, Kim, who rates the company "Neutral," said the delay came as no surprise and had projected a 2009 filing date anyway.
Separately, BMO Capital Markets analyst Jason Zhang said in a note that investors should remain "cautious" on Medarex until the drug's future becomes clearer. Zhang rates Medarex "Market Perform."
Shares of Medarex are down more than 50 percent from a 52-week high of $18.23 in August.
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