Vestar Inc. has reported preliminary clinical data showingpromise for its liposomal form of a cancer drug in treatingKaposi's sarcoma associated with AIDS.
Alex. Brown & Sons analyst David Webber reconfigured hisearnings model for the San Dimas, Calif., company on the news,reiterating his "strong buy" recommendation.
The stock (NASDAQ:VSTR) picked up $1.50 to close at $18.50. Ithad fallen to $10.75 during the mid-November biotech sell-off.
In a Phase I/II study described Monday at the Denver meetingof the American Society of Hematology, 30 Kaposi's sarcomapatients were treated with DaunoXome. Sixteen could beevaluated statistically, and of those, 60 percent showed at leastpartial responses. Forty percent had their cancers stabilize.
The drug was well-tolerated in a patient group that includedmany on AZT, which can suppress bone marrow functions.Anti-cancer agents such as daunorubicin typically affect themarrow as well, thus limiting their usefulness as adjunct AIDStherapies. Yet no patients had to stop the liposomal drug due toside effects.
"These promising results suggest a considerably higherprobability that DaunoXome will be shown safe and effective,that our projection of approvals in both the U.S. and Europe by1994 is realistic," Webber wrote in a report issued Tuesday,adding that the AIDS market alone is $150 million annually.
In his revised earnings estimates, Webber projected a 28-cent-per-share net in 1992, lower than his earlier 42-cent estimatebecause of anticipated spending to develop DaunoXome"aggressively." He put 1995 net per share at $2.26, up from anearlier $1.75. Webber's 12-month price target is $25 a share.
Vestar chose daunorubicin because it incorporates readily intothe company's liposomes. DaunoXome will be the second druglaunched by the company, following its liposomal formulationof the anti-fungal amphotericin B, which is already sold inEurope.
The company has expanded its Phase II testing of DaunoXometo a larger group of Kaposi's patients, and plans to start PhaseIII trials next year.
Phase I testing of the compound against solid tumors is underway, with Phase II trials planned for next year.
-- Roberta Friedman, Ph.D. Special to BioWorld
(c) 1997 American Health Consultants. All rights reserved.