NEW YORK (CNNfn) - Shares of EntreMed Inc., a little-known biotechnology company, rocketed 330 percent Monday on news the upstart biotechnology firm found a cure for cancer in laboratory mice.
Although experts cautioned the treatments may not produce the same results in humans, and a commercial version of the drug could take more than a decade to hit the market, investors scurried to acquire shares of the Rockville, Md.-based company.
At one point, EntreMed shares soared as high as 85 before ending at 51-13/16, up 39-3/4. The gain added a staggering $509 million to EntreMed's market capitalization and ignited interest in other biotech stocks as well.
(Click here to see a chart of EntreMed)
The treatment involves two newly developed drugs -- angiostatin and endostatin -- that are designed to choke off tumors' blood supply.
Angiostatin stops the development of blood vessels that tumors need to grow. Endostatin comes from a piece of a protein and seems to be produced by tumors to stop other tumors from developing in the body.
It explains why some people become literally ridden with cancer after a tumor is removed -- once the big tumor is gone, there is nothing to stop other tumors from growing.
Tumors disappeared on mice
Scientists said large tumors on mice shrank and then disappeared completely when they were exposed to the treatment.
The drugs were created by Dr. Judah Folkman at Children's Hospital in Boston, whose team pioneered the concept of attacking cancer by blocking its ability to grow new blood vessels.
Although the lab report brings new hope to cancer patients, and has stirred the scientific community, some analysts say Wall Street should carefully consider the obstacles still facing of EntreMed. The high-risk biotech sector, they say, has burned investors before.
"I don't think the stock is going to go higher, if anything it's been overdone for the short term," said Ferris Baker Watts analyst Kurt Funderburg.
In the best case scenario, he added -- assuming EntreMed files an investigatory drug application ahead of schedule and the Food and Drug Administration gives the company fast track approval clearance -- it will be 2002 or 2001 at the earliest before these products hit the market.
"Despite how huge this could be, I think $52 per share is a bit overdone for something that hasn't even been tested in humans," he said. "We all hope it is successful, but it is still a speculative situation."
Cancer cure a long way off
"The data are very impressive and compelling. But it is still mouse data," said Jim Pluda, an oncologist with the National Cancer Institute (NCI) . "There have been a number of compounds in the past that have cured mice and did not translate into efficacy in human clinical trials. The field of oncology is littered with the bodies of agents that were the next cure for cancer."
EntreMed's senior vice president of research and development Edward Gubish said the company will test the products in larger animals before it moves on to humans. (184K AIF) or(184K WAV)
EntreMed's Chief Financial Officer Nelson Campbell told Reuters the company hopes to begin human clinical trials of the cancer treatment in 12 months.
Since 1995, Bristol-Myers Squibb Co. has licensed angiostatin to help bring the drug to market. Campbell said EntreMed is in discussions with other major drug companies to develop the other drug, endostatin.
The relationship with Bristol-Myers has given EntreMed a $25 million shot in the arm to date.
Drugs offer few side effects
According to studies, EntreMed's drugs are naturally occurring agents with few side effects -- a welcome change from the toxic drugs or radiation used to treat cancer today.
Pluda said angiostatin is a portion of a normal circulating blood product called plasminogen. Endostatin is a fragment of a type of collagen normally found in the body but localized around blood vessel cells.
The combined drug approach initially was reported in the November issue of Nature, a science journal. However, a front page story in Sunday's New York Times triggered a new round of interest.
Nobel laureate James Watson warned a cure for cancer as a result of this technology remains to be seen but he said the news "is the most promising thing I have seen in my lifetime."
He did, however, say that "it is the most promising thing I have seen in my lifetime."
According to industry statistics, each new drug launched requires an average of $320 million in research and development expenditures and a dozen years to move from clinical trials to commercialization
But EntreMed Chairman, Chief Executive and President John W. Holaday said the company is hoping to bump up the timeline.
Despite the encouraging data, however, even the researchers say the successful transfer of this treatment from mouse to man is a long way off. It could be years before the drug can be tested in humans.
The news also helped lift Bristol-Myers' stock (BMY), albeit to a lesser degree. Shares of the New York-based pharmaceutical maker closed at 109-31/2, up 3-1/2.
EntreMed, which focuses its research on the role of blood and blood vessels in health and disease, also is attempting to reintroduce thalidomide, a sedative banned in Europe in the 1950s because it caused birth defects.
With EntreMed's financial support, researchers at Children's Hospital discovered that the very property which induced birth defects may help cancer patients by starving the growth of tumors. Furthermore, in the elderly and in diabetics, blocking new blood vessel growth may prevent blindness.
-- from staff and wire reports