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GPC Biotech Shares Soar On Satraplatin Cancer Drug Data
By Gangolf Schrimpf, Of DOW JONES NEWSWIRES
FRANKFURT -(Dow Jones)- Shares in GPC Biotech AG (GPCB) jumped nearly 45% Monday after the German biotech company unveiled positive research results for its cancer drug Satraplatin.
The Munich, Germany based company said late Sunday that it will ask the U.S. Food and Drug Administration for marking approval for the drug sometime during the fourth quarter of this year. GPC's partner, Pharmion Corp. (PHRM), aims to seek European marketing approval in the first half of 2007.
"This is the most important event in the nine years old company history," GPC chief executive Bernd Seizinger told a conference call Monday.
The trial evaluated Satraplatin as treatment for prostate cancer and showed a 40% reduction in the risk of disease progression.
Piper Jaffray analyst Sally Bennett said she currently forecasts peak sales of Satraplatin of over EUR300 million. The analyst reiterated her outperform rating on the stock.
Goldman Sachs analyst Stephen McGarry said that although he expects the clinical relevance of the published data may be questioned, he sees off label use in indications other than prostate cancer will drive Satraplatin's sales once the drug is on the market. The analyst stuck to his buy recommendation and his 12 months price target of EUR18 per share.
West LB analyst Daniel Wendorff said Sunday's news confirmed his positive view on the drug and reiterated the buy rating on the stock.
Shares of GPC Biotech traded Monday at 1340 GMT at EUR14.96 up 39.2% or EUR4.21 in a slightly up German TecDax surrounding.
GPC Biotech signed a development and distribution agreement with Pharmion in December 2005, giving GPC Biotech up to $270 million plus a share of Pharmion's sales of the drug once on the market.
By this agreement Pharmion holds the distribution rights for Europe, Middle East including Turkey and Australia plus New Zealand.
GPC Biotech retains distribution rights for the U.S., Canada, Japan and other Asian companies.
"We are expanding our marketing and distribution structures in the U.S. as fast as possible," CEO Seizinger told a conference call Monday.
However Seizinger said the sales representatives will not be hired before the drug receives U.S. approval. The company expects to need 50 to 80 sales reps, GPC said Monday.
GPC's chief executive said distribution of the drug in the U.S. could be done with a partner. But he added that GPC Biotech will "retain the lead" in that country.
Seizinger also said GPC will not sell Satraplatin in Asia unassisted, as that task would be "impossible". He said GPC Biotech is in negotiations with a partner in Asia, but didn't elaborate further.
GPC's management said the drug will loose patent protection in the U.S. by 2010, but the company plans to apply for a five-year extension. The patent currently expires by 2009 in Europe, but GPC said it's confident it can prolong patent protection there until 2018.
GPC has eight other clinical trials running with Satraplatin, all in early clinical test stages to treat cancer. Some of those trials aim at treating cancer with a drug combination of Satraplatin and other, already established drugs like Bristol Myer's drug Taxol, Sanofi-Aventis SA's (SNY) cancer treatment Taxotere or Eli Lilly & Co.'s (LLY) cancer drug Gemzar.
GPC Biotech said one of those eight trials - which targeted breast cancer - has been stopped. The company added that it expects new research data for one of the remaining seven - targeting lung cancer - to be released in the first quarter 2007. That trial is being conducted as a combination of Satraplatin and Taxotere.
The German biotech company began late stage clinical testing of Satraplatin for prostate cancer in 2003, after it in-licensed the rights from U.S. company Spectrum Pharmaceuticals Inc. (SPPI) in 2002. Spectrum won the rights from originator Johnson Matthey Plc (JMAT.LN) only after U.S. pharmaceutical company Bristol Myers Squibb Co. (BMY) acquired the drug's rights from Johnson Matthey but gave them back to the drug inventor company later on.
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