UPDATE: Bank of America Merrill Lynch Reiterates Buy Rating, Raises PO on Ariad Pharmaceuticals

In a report published Monday, Bank of America Merrill Lynch reiterated its Buy rating on Ariad Pharmaceuticals

, and raised its price objective from $26.00 to $30.00. BofA Merrill Lynch noted, “The first clinical data for ARIA's ALK/EGFRm kinase inhibitor AP26113 ('113) were presented at the ESMO meeting over the weekend in patients with advanced refractory malignancies. While '113 is in early stages of development, the response rates in patients with ALK+ non small cell lung cancer were striking (8/9 assessed patients achieved a partial response in 60mg+ dose cohorts), including patients naive and resistant to PFE's first in class inhibitor Xalkori. Notably, one patient with active ALK+ brain metastases at baseline achieved significant tumor reduction while on treatment. There is preliminary evidence of '113 activity in patients with mutated EGFR (1PR/6 assessed at 120mg+), but as expected, higher doses may be required to achieve clinically relevant activity. Tolerability to date is very good, with toxicities limited to gastrointestinal events and pneumonia, at rates that are possibly lower than Xalkori, but more data are needed to fully assess safety. Dose expansion at the 240 mg dose is ongoing and further dose escalation is possible. Based on these data we are increasing our PO from $26 to $30, to reflect increased probability of successful development of '113 for ALK+ disease, with additional upside potential for validation of EGFRm activity.” Ariad Pharmaceuticals closed on Friday at $24.21.