Wednesday, December 12, 2012

Ziopharm shares fall on analyst downgrade

WASHINGTON (AP) -- Shares of Ziopharm Oncology Inc. fell Wednesday after an analyst said the company's experimental cancer drug for sarcoma may not be effective enough to win regulatory approval.

THE SPARK: Jefferies analyst Eun Yang downgraded the company's shares to "Hold" from "Buy" after interviewing cancer experts who suggested the company's drug, palifosfamide, may not win approval from the Food and Drug Administration.

THE BIG PICTURE: The drug is aimed at treating reoccurring soft-tissue sarcoma, which are cancers that form in connective tissue. Palifosfamide is the company's lead drug candidate and it currently has no other products on the market.

Ziopharm is expected to begin reporting late-stage study results for the drug next year.

THE ANALYSIS: Experts say there is a 40 to 50 percent chance that palifosfamide will slow the progression of sarcoma tumors by about three months, according to Yang. Ziopharm has indicated to investors that it believes this performance would be good enough to win FDA approval.

But Yang's experts say the company will likely also have to show that the drug actually extends patients' overall survival, and they estimate there is less than a 50 percent chance of the drug hitting that target.

Yang cut the stock's price target to $4 from $7.

STOCK MOVEMENT: Shares of New York-based Ziopharm Oncology Inc. fell 20 cents, or 4.5 percent, to $4.24 in late morning trading Wednesday.

Source: http://news.yahoo.com/ziopharm-shares-fall-analyst-downgrade-162922895.html

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