Focus: Promising clinical trial results for a cancer treatment
>> let’s recap the after-hours earnings out from agilent, biggest maker of scientific test equipment. the company missed its earnings forecasts for the second quarter and will not meet expectations for the third quarter. for the second quarter, the company, excluding items, reported earnings per share of 20 cents while analysts expected 21. sales came in matching expectations at $1.69 billion, the first decrease in sales the company has reported in six quarters. the problem has to do with a sales decline in its chip division. for the third quarter, it sees third-quarter revenue coming in between $1.7 and $1.8 billion and analysts forecasting $1.8 billion. for third-quarter operating earnings, the company expects to earn 23 to 28 cents a share. analysts, on average, at 31 cents so short for the third quarter on the revenue as well as the earnings front. those shares down 3.4%. going into today’s close, those shares were already down 15% in the past 12 month of trading, currently trading for 16 times 2006 profit forecasts. turning our attention to what happened over the weekend. onyx pharmaceuticals announced promising clinical trial results for a cancer treatment called sor savenin. the product targets proteins involved in cancer cell growth but some investors were hoping more from the drug in terms of progression survival rate.
>> we doubled the p.f.s., the time to progression, in our trial. it’s a rigorous study and this is a dramatic effect, with substantial benefit for kidney cancer patients. so we’re encouraged by that and plan to file for approval with this data and in addition, the data was so strong that we, after consultation with the f.d.a., made a decision to take patients who had been on placebo, cross them over to the drug and announced that we were expanding the access to all kidney cancer patients who could have access prior to marketing approval.
>> when will you file?
>> our filing plans will allow us to enter the market in the first half of 2006.
>> sutent, the drug from pfizer, we spoke about it earlier today. probably your main competitor in the renal cell cancer arena. the difference appears to be that sutent appears to be more effective but that the toxicity and side effects from your drug are fewer. how do you convince doctors that your drug is the one that they want to prescribe?
>> actually, both of these compounds, it’s good news for kidney cancer patients because they’re both active. over 3/4 of our patients had tumor shrinkages and there are differences in the side effect profile that as physicians and patients get experience with it, they’ll be able to sort out those differences.
>> one of the aspects of sutent from pfizer was for kidney and possibly breast cancer. what other indications could sorafenib could be used for.
>> on friday we announced we are initiating a randomized study for patients with myeloma.
>> when will we see the next updates on the trials for liver cancer and melanoma?
>> those are randomized studies soa that data won’t be available until completed. we and bayer have over a dozen studies we are supporting and appreciate very much the work of the national cancer institute and investigators in running more than two dozen studies in a variety of cancers not only as a money on therapy, which we’ve seen activity with renal cancer, but also in combination of other agents.
>> turning our attention to commodities, checking crude at the close, ending the day little changed. earlier, had reached a three-month low after opec’s secretary general said the group may boost production capacity by the end of this year. among other energy movers, gains for gas futures, heating oil futures as well as natural gas futures. competition in the package delivery business heating up. su keenan has more on what the u.p.s. merger means for the industry and economy.
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below $49 a barrel. the gains for the s&p and dow, the first time we’ve seen an advance in three days, coming as investors are more optimistic about the pace of interest rate increases. deirdre bolton has details.
>> we did see oil at a three-month low and the weaker manufacturing data combine to calm investor fears about how much further the fed will raise interest rates. largest part aret of the s&p 500, financials, are rallying. interest-rate-sensitive stocks including citigroup, bank of america, wells fargo and u.s. bancorp all closed higher. a weaker-than-expected u.s. manufacturing report convinced traders that the fed’s steady increase in interest rates may be ending, something that could help banks’ profit margins. looking ahead, investors are eager to see this week’s reports on producer and consumer inflation.
>> for investors, the salient point is this, is the fed closer to the end or in the middle of a tightening cycle. from the data we’ve seen, the fed could be neither the end of the rate hikes.
>> retailers, including lowe’s, pushed markets higher. the home improvement chain reported a 31% increase in earnings, the most in six quarters. among the reasons for the retail rally, oil trading at the lowest level in almost three months. an opec official said the group may boost production.
>> with oil pulling back over $10 from its all-time high, that liberates a lot of discretionary spending by the consumer and allows profitability to be more solid for companies.
>> lower oil prices meant lower stock prices for oil companies including exxon-mobil, chevrontexaco and conocophillips.
>> we’re probably in the sixth or seventh inning on a comedown on energy stocks.
>> material stocks fell with dow chemical dropping as much as 3.5%. j.p. morganchase downgraded the stock, citing concern about the company’s commodity-oriented business. the routers c.r.b. index closed lower today. the gauge has slumped more than 9% since reaching a 20-year high on march 16.
>> here’s a report from deborah kostroun.
>> the dow jones industrial average closing near its best level of the day. we have been seeing a lot of big moves in the market so far for the month of may. today marks the fifth time this month that the dow has gained or lost over 100 points during the trading session and there have only been 11 trading days so far this month so that’s a good percentage, 45% of the time this month the dow has moved up or down 100 points. looking at the gainers in the session, retail performing well. consumer durables and bank stocks. retail performing well after lowe’s, number two home improvement retailer, saying first-quarter earnings came in better than expected, in fact, it was their best earnings in almost six quarters. home depot releases their earnings tomorrow. consumer durables also on the winning end. many of the homebuilders putting in a a strong performance. banks and financials doing well. we had a weaker-than-expected report on manufacturing in the new york area, easing concern that the federal reserve will step up their pace of interest rate increases so many of the banks and financial stocks getting a lift. looking at the laggards in the s&p 500, on the losing end, energy, media, materials eking out a gain. many of the integrated oil stocks lower. exxon-mobil at its lowest price in 3 1/2 months. oil services, a little bit of a mixed bag but the concern with oil closing below $49 a barrel. inventories at their highest in almost five years so it seems like we’ve got plenty of supply and opec saying they could boost production capacity by the end of this year. biomedical stocks also in the spotlight mainly because investors sifting through several drug trial updates from the asco conference going on. u.p.s. looks like making a bid to buy regional trucking company overnight, helping transports.
>> over at the nasdaq marketsite, it was transporting pacing gains. robert gray has details.
>> lower crude prices and weaker-than-expected manufacturing report in new york state helping to boost stocks as it eased concerns that the federal reserve would step up the pace of interest rate increases. we saw a broad-based rally paced by the transports. we also saw bank and technology stocks rising. the nasdaq moving to key technical levels, closing above the 50-day moving average for the first time since march 7 and close on the 200-day, falling less than one full point below the 200-day moving average. it last closed above that on april 12. also, want to look at a story stock within that transport group. overnight rising as u.p.s. buying the trucker for $1.25 billion in cash. u.p.s. wanting to increase ground shipment services. another story stock we’re following, m.c.i., they had their annual meeting today. shareholders withholding 28% of their votes from c.e.o. michael capellas, protesting the board’s decision to accept verizon’s takeover bid. nine of m.c.i.’s largest shareholders want m.c.i.’s directors to seek better terms than that offered by verizon and they want to encourage qwest to return to the bidding after abandoning a $9.75 billion offer. qwest responded, saying qwest will continue do what’s best for its investors so we will watch that situation to see if qwest returns to bidding. looking at internet stocks, outperforming the broader market in may, google shares within a quarter of their record close. ebay and amazon shares rising and all of them up 5% or more so far in the month of may while the s&p recording less than 1% gain. at the nasdaq, i’m robert gray.
>> when it comes to new cancer drugs, one of the biggest events every year is the conference of the american society of clinical oncologists, stocks reacting to data that has been presented. bob bowden joins us with the latest. bob, a lot of activity today.
>> indeed. a lot of pharmaceutical and biotech stocks down early in the session and rallied later in the day. of the hundreds of companies presenting data at the asco conference, one of the biggest stories was presented by genentech. the company presented studies showing avastin was more effective than previously thought in treating a variety of cancers.
>> what’s truly remarkable about avastin now is that we’ve shown extremely important benefit for patients now in colon cancer, in lung cancer and in breast cancer and in addition, we have ongoing trials, phase iii, in kidney cancer, pancreatic, ovarian and prostate cancers.
>> i think that was seven different cancers she mentioned. genentech shares up 1.5% on the day. competition among kidney cancer drugs, data showing sutent by pfizer is more effective than sorafenib, co-produced by onyx and bayer. wachovia analyst downgraded onyx pharmaceuticals because of the specter of that competition. on the day, we saw those shares plunging, onyx down over 14% on the day, reacting to the wachovia downgrade. a.d.r.’s for bayer were down, too, just fractionally. and pfizer, the competition with the sutent drug for kidney cancer, up 1.33%. celgene released positive new data on its blood cancer drug, revlamid.
>> the f.d.a. has asked us and we’re implementing expanded access program to make the drug available even before approval in the united states free of charge to multiple myeloma patients.
>> we had a rally in celgene shares, closing near the lows of the session, but up 4.5% on the day.
>> we’re going to stick with the theme and hear more from onyx because two years ago the company eliminated its pipeline to focus entirely on the development of one drug. is that decision about to pay off? we’ll hear from the chief executive of onyx. peep it here.
