EntreMed off 9.5%, despite FDA key OK

Rockville firm wins right to human tests of anti-cancer drug

Analyst downgrades stock

Angiostatin protein promises to block blood to tumors

Biotechnology

February 01, 2000|By Mark Guidera | Mark Guidera,SUN STAFF

The U.S. Food and Drug Administration gave Rockville-based EntreMed Inc. the green light yesterday to begin human studies of Angiostatin, its widely touted experimental anti-cancer drug

EntreMed shares, however, took a hit as technology investors grew jittery, and an analyst downgraded his recommendation on the stock.

EntreMed closed down $4.125, or 9.5 percent, at $39.25. Shares traded as high as $69.50 on Jan. 20., their 52-week high.

Yesterday's market reaction was in contrast to what occurred in May 1998 when shares in the small biotechnology outfit skyrocketed 330 percent in one day after a front-page Sunday New York Times article portrayed the protein behind the drug as a potential "cure" for cancer.

Alan Auerbach, a biotechnology analyst with First Security Van Kasper, downgraded his recommendation on the stock yesterday to "hold" from "buy" and set a $42 price target 12 months out. He did not return a phone call for comment.

Several of the big biotechnology issues also were lower yesterday as investors took profits in the sector. For example, shares in PE Corp.-Celera Genomics Group, a Rockville gene-sequencing outfit that has seen a 1,500 percent rise in its stock since last summer, dived $7 yesterday to close at $203. Earlier in the day, shares traded as low as $180.125.

Angiostatin is the second experimental tumor-blocking drug that money-losing EntreMed has received FDA clearance to test on humans. The other drug, Endostatin, is undergoing Phase I safety tests at three medical sites in the United States.

Both proteins were discovered in the mid-1990s by Dr. M. Judah Folkman of the Harvard Medical School and Children's Hospital in Boston. They belong to a group known as angiogenesis inhibitors that block new blood vessels that are essential for tumor growth.

More than a dozen biotechnology and drug companies have such agents in development.

Last February, drug-giant Bristol-Myers-Squibb Inc. canceled a licensing agreement with EntreMed to develop and market Angiostatin. Shares in the company were pummeled after Bristol-Myers' surprise move.

Dr. John W. Holaday, EntreMed's chairman, president and chief executive officer, said yesterday that the company had capitalized on the Bristol-Myers rejection by moving the drug quickly through the laboratory testing and manufacturing process itself so that it could be studied in humans this year.

"We are continuing on our aggressive drug development timetable," said Holaday. He pledged to move another experimental cancer drug into human safety studies later this year.

Angiostatin will be tested to ensure it is safe on a small group of cancer patients at Thomas Jefferson University Hospital in Philadelphia.

EntreMed said it expects the hospital to complete enrolling patients for the study by April.

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