May 22, 2017 / 3:05 PM / 3 months ago

Puma Biotech shares jump after initial FDA review of cancer drug

(Reuters) - Puma Biotechnology Inc's experimental breast cancer drug neratinib appears to be effective, though there is some uncertainty as to the magnitude of the benefit, a preliminary review by the U.S. Food and Drug Administration concluded.

The review, posted on Monday on the FDA's website, sent the company's shares up as much as 84 percent to $69.35 from $37.80 before dropping back to $53.75 in afternoon trading.

A panel of outside advisers to the FDA will meet on Wednesday to discuss the drug and recommend whether it should be approved. The FDA is not obliged to follow the advice of its advisers but typically does so.

Analysts expect the drug, which would be marketed under the brand name Nerlynx if approved, to win a favorable panel vote.

Matthew Eckler, an analyst at RBC Capital Markets, said in a research note that he would be surprised if neratinib emerges completely unscathed from the meeting, but that the odds are tipped in its favor.

"Ultimately, we haven't seen anything in the materials posted today that fundamentally changes our thesis, and we continue to expect neratinib to exit its panel with a positive outcome," he said.

Neratinib is a pill designed to treat early stage breast cancer in patients with the HER2 genetic mutation. About 25 percent of breast cancers are HER2 positive.

A late-stage clinical study showed that the drug improved disease-free survival in HER2 positive patients by 2.3 percent. It found that after two years, about 94.2 percent of patients in the neratinib arm were alive without their disease progressing, compared with 91.9 percent in the placebo arm, the FDA said.

The main safety concern was diarrhea, which affected 95 percent of patients.

Additional reporting by Ankur Banerjee in Bengaluru; Editing by Dan Grebler and Tom Brown

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