New Cancer Treatments Boost Drug Firms
Cancer specialists and Wall Street analysts agree: A new class of experimental drugs could be a major breakthrough in the war against cancer.
The drugs, still in early testing by Merck and Bristol-Myers Squibb, help the immune system detect otherwise-invisible cancer cells and attack them. Shares of both companies rose more than 3 percent Monday. In small samples of advanced melanoma patients, the new drugs shrank tumors and extended lives of patients with advanced melanoma.
The data on drugs that are being developed by major pharmaceutical firms were the talk of a five-day conference of cancer specialists in Chicago, hosted by the American Society of Clinical Oncology. The antibody drugs enable the patient's immune system to identify tumor cells that otherwise would evade detection because they have the equivalent of an invisibility cloak. Once the cancer cells are "uncloaked," powerful immune system cells called T cells can target and destroy the cancer cells.
The promising results, while in small patient studies, pumped up shares of Merck and Bristol-Myers to multiyear highs as several stock analysts issued encouraging reports stating that the drugs seem effective and had relatively minor side-effects, mostly diarrhea, fatigue, itching and rashes. A few patients developed lung inflammation.
UBS Securities analyst Marc Goodman wrote that Merck's strong results from its study and its program for testing its drug against lung, breast, bladder and other cancers "should enable it to be very competitive in this potentially large and exciting space."
"Bristol-Myers stole the show," Barclays Capital analyst Tony Butler wrote to investors. "Most startling was the estimated one-year overall survival rate of 82 percent." Some patients in Bristol-Myers' study had their tumors shrink even after they stopped taking the drug, indicating its effects endure, at least for a while.
Taxpayers paid the bill for their huge bailouts. Now both AIG and General Motors are set to rejoin the S&P 500 for the first time since their collapse. The decision might help boost share prices for both companies. GM is still partially owned by the U.S. government, which is gradually selling the remaining stake in the firm.
Without a $50 billion bailout in 2009, General Motors faced liquidation. AIG received $182 billion in government funds after warnings that failure to rescue the firm would lead to a collapse of the financial system. They are not banks but could be a threat to the financial system if they collapse. AIG and some other firms fall into this group.
Federal regulators say these companies need stricter oversight. The near-collapse of AIG in 2008 helped trigger the financial crisis and it received the $182 billion federal bailout that it has since repaid. The Financial Stability Oversight Council didn't name the firms or say how many it wants to designate as so big and interconnected that their potential troubles could imperil the financial system. The nonbank financial firms have 30 days to notify the council that they're contesting the proposed designation.
A U.S. government lawyer is portraying Apple as a corporate bully that swaggered into the market for electronic books in 2010, forcing an end to price competition and costing consumers hundreds of millions of dollars. But an Apple lawyer is rebutting the government's claims, saying the company did not conspire with publishers to boost e-book prices. A Justice Department lawyer claimed at the start of a trial in New York that Apple and five book publishers deliberately tried to eliminate Amazon's $9.99 bargain price for the most popular e-books.
More volatility for the stock market. The Dow Jones index gained 138 points Monday, and the Nasdaq was up 9. This came after a sharp loss on Friday, and despite a negative report on manufacturing. The Institute for Supply Management said its index of U.S .manufacturing activity fell in May to its lowest level since June 2009, as overseas economies slumped and weak business spending reduced new orders to factories.
Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc