Shares of biotech company Genentech Inc. jumped Thursday on strong analyst comment, several days after the company suffered from a setback on its cancer drug, Avastin.
The stock gained $1.18, or 1.5 percent, to reach $78.87 in morning trading on the New York Stock Exchange. Shares have traded between $75.58 and $100.20 over the last 52 weeks.
The upward shift contrasts with Monday, when the stock fell 4.6 percent on news the Food and Drug Administration asked for more data on clinical trials testing Avastin for use in breast cancer. The drug is already approved for colorectal cancer.
The request for more safety and efficacy data includes an independent radiologic assessment, but the company will not need to conduct a new clinical trials. Analysts held their positions on the stock, with several saying the news did not impact the ultimate approval for the expanded use.
On Thursday, Stifel Nicolaus & Co. analyst Edward H. Nash took a bullish view on the stock, upgrading it to "Buy" from "Hold," and setting a $90 price target.
"We believe that the FDA will ultimately grant approval based on the robustness of the Avastin clinical data seen to date in the breast cancer setting," he wrote in a note to investors.
The delay will likely not impact physician's use of Avastin, he said, and the stock price decline sparked by the news has provided an attractive entry point for investors. Momentum going into the fourth quarter will be sparked by product expansions and launches, such as Herceptin in breast cancer and the launches of Tarceva and Lucentis.
The FDA request is more indicative of increasingly stringent approval standards for cancer treatments and not a reflection any issues with Avastin. The drug, he notes, is already used off-label by physicians for breast cancer.
Merrill Lynch analyst Eric Ende added the company to his focus list in a note to investors, saying Avastin is expected to be a long-term growth driver for the company, based on its use for colorectal cancer and growth in treating lung and breast cancer.
"As a strong stable growth, high beta story, we believe Genentech should be bought in the current environment," he wrote.
Current and potential indications for the drug could allow it to achieve annual sales of more than $10 billion, he wrote. Second-quarter U.S. sales of Avastin rose 72 percent to $423 million.
The stock gained $1.18, or 1.5 percent, to reach $78.87 in morning trading on the New York Stock Exchange. Shares have traded between $75.58 and $100.20 over the last 52 weeks.
The upward shift contrasts with Monday, when the stock fell 4.6 percent on news the Food and Drug Administration asked for more data on clinical trials testing Avastin for use in breast cancer. The drug is already approved for colorectal cancer.
The request for more safety and efficacy data includes an independent radiologic assessment, but the company will not need to conduct a new clinical trials. Analysts held their positions on the stock, with several saying the news did not impact the ultimate approval for the expanded use.
On Thursday, Stifel Nicolaus & Co. analyst Edward H. Nash took a bullish view on the stock, upgrading it to "Buy" from "Hold," and setting a $90 price target.
"We believe that the FDA will ultimately grant approval based on the robustness of the Avastin clinical data seen to date in the breast cancer setting," he wrote in a note to investors.
The delay will likely not impact physician's use of Avastin, he said, and the stock price decline sparked by the news has provided an attractive entry point for investors. Momentum going into the fourth quarter will be sparked by product expansions and launches, such as Herceptin in breast cancer and the launches of Tarceva and Lucentis.
The FDA request is more indicative of increasingly stringent approval standards for cancer treatments and not a reflection any issues with Avastin. The drug, he notes, is already used off-label by physicians for breast cancer.
Merrill Lynch analyst Eric Ende added the company to his focus list in a note to investors, saying Avastin is expected to be a long-term growth driver for the company, based on its use for colorectal cancer and growth in treating lung and breast cancer.
"As a strong stable growth, high beta story, we believe Genentech should be bought in the current environment," he wrote.
Current and potential indications for the drug could allow it to achieve annual sales of more than $10 billion, he wrote. Second-quarter U.S. sales of Avastin rose 72 percent to $423 million.
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