Ebb & Flow

Even though the market had expected approval of Genentech's Avastin bevacizumab, that expectation wasn't fully loaded into the stock. DNA was up $12.57 (13%) to $107.89 on the week after Thursday's FDA approval of Avastin as a first-line treatment for metastatic colorectal cancer in combination with 5-fluorouracil (5-FU). That translated into a $6.6 billion market cap gain.

To put that into context, DNA gained roughly the equivalent of a MedImmune (MEDI; $6.4 billion) on the week. DNA now stands valued at $56.5 billion, which is $37.1 billion (191%) above DNA's market cap of $19.4 billion last May, before the first major Avastin data were announced(see BioCentury, May 26, 2003). The weekly move included gains of $7.02 to $103.10 on 10 million shares on Thursday's news and $4.79 on 14.7 million shares on Friday.

DNA has had a busy nine months, including FDA approvals of its Raptiva efalizumab for moderate to severe psoriasis and Xolair omalizumab for allergic asthma. Nevertheless, $18.3 billion (49%) of the $37.1 billion market cap gain can be attributed to the two Avastin events. Using the $18.3 billion figure, DNA would have to sell $1.8 billion of Avastin, using Amgen's price-to-sales ratio of 10.

The market had been anticipating Avastin's approval since before year end. Given FDA Commissioner Mark McClellan's actions to push a number of cancer compounds through FDA on his watch, it was

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