Chardan Affirms ARIAD (ARIA) at 'Buy'; Narrower Label Impacts Iclusig Usage

Chardan Capital affirms ARIAD Pharma (Nasdaq: ARIA) at Buy with a $9 price target following Q2 results.

ARIAD posted Q2 revs of $12.1 million and loss of $0.30 per share, with Chardan at revs of $11.6 million and loss of $0.30 per share.

Analyst Ling Wang noted the following key points from the quarter:

• Iclusig is being used in later lines of patients impacted by a narrower label. Through 2Q14, ~550 patients in the U.S. received Iclusig in the commercial setting (with a weekly penetration of over 50%) vs. 340 in 1Q14. Management indicated that Iclusig usage in the second and third line patients is ~45% with the rest of the patients in the fourth or plus line, suggesting the trend is stabilizing from the prior quarter, impacted by the narrower label introduced in December 2013. Iclusig also appears to be used in less chronic phase patients with ~50% of Iclusig patients having chronic-based disease (CP), vs. ~60% as of 1Q14), a trend contrary to management's prior prediction.

• Iclusig continues to be used at lower starting doses in the U.S. Management estimates nearly half of patients are started at dose less than the recommended dose of 45 mg/day, with a patient mix of 35%:35%:30% at 45mg, 30mg and 15mg daily, respectively. Management indicated lower drug discontinuation rates through July 2014 as compared to 2013, but did not provide detailed discontinuation rate. ARIA is on track to implement a new pricing/packaging strategy to address the current pricing disparity between different doses by 3Q14.

• Iclusig label review in EU continues to experience delay. Management expects the review of the article 20 by the PRAC and CHMP to last until October this year, vs. prior estimate of in July this year, which shall impact the Iclusig launch in some EU countries. A trend to use Iclusig at later line of patients lower dose was also seen in EU. Iclusig appears to be used in more advanced patients in the EU, with only 25% of Iclusig patients in the chronic phase and only 25% in the second and third line patients (with the rest at fourth line or above).

For an analyst ratings summary and ratings history on ARIAD Pharmaceuticals click here. For more ratings news on ARIAD Pharmaceuticals click here.

ARIAD Pharmaceuticals closed at $5.38 yesterday.

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