Ariad shares sink after Bernie Sanders demands info on its leukemia drug

Christine Wang
Updated
Ariad shares sink after Bernie Sanders demands info on its leukemia drug

Shares of Ariad Pharmaceuticals (NASDAQ: ARIA) sank Thursday after Sen. Bernie Sanders and Rep. Elijah Cummings sent a letter to the company, demanding more information about its price increases for Iclusig, a drug used to treat chronic myeloid leukemia.

The stock was up slightly before the letter was announced, then sank as much as 7 percent. It later recovered some of its losses and ended the day just slightly lower.

Ariad said it recognizes that "oncology drugs are expensive," but it stands behind "the importance and efficacy" of its products.

"Iclusig is the first drug that we have brought to market after years of risk taking and research, and it serves a very small and seriously ill group of cancer patients," the company said in a statement.

Ariad said it received the letter and plans to respond to Sanders and Cummings' request.

Source: FactSet

The company drew anger after it raised the price of Iclusig for the fourth time in 2016 to a list price of nearly $199,000 a year. In the letter addressed to Ariad CEO Paris Panayiotopoulos, the two lawmakers said Ariad's "outrageous sales tactics" show that the company is "more concerned with its profit than with its patients."

The Food and Drug Administration originally approved Iclusig for a larger patient group in December 2012, but reports of "serious and life-threatening blood clots" and other side effects led to a temporary sales suspension. When Ariad was given the go ahead to resume sales the following year, the FDA specified that the drug could only be sold to a smaller patient subset.

Last week, Sanders tweeted about the price hikes for the drug, sending Ariad shares down 15 percent . The senator from Vermont later pledged to take on the drug industry and "lower the cost of medication across the country."

Following Sanders' comments, Ariad said in a statement "our pricing reflects our significant investment in R&D, our commitment to the very small, ultra orphan cancer patient populations that we serve and the associated risk with research and development."

The FDA limited Iclusig only to chronic myeloid leukemia patients who have a genetic mutation that makes them resistant to other treatment options.

The company added that it spent 143 percent of its total revenue in 2015 in research and development for treatments of rare cancers.

Lawmakers have recently turned their attention to drug pricing practices in the pharmaceutical industry, calling out price hikes at Valeant Pharmaceuticals (Toronto Stock Exchange: VRX-CA) and Mylan (NASDAQ: MYL), among others.



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