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ALLISON GATLIN

The Surprising Way Mirati Therapeutics Is Angling To Rival Amgen — And Could Succeed

Shares of MRTX stock rocketed Tuesday after Mirati Therapeutics unveiled early — but promising — test results for a lung cancer treatment.

On today's stock market, MRTX stock catapulted 36.5% higher to close at 58.89.

Mirati added its treatment, adagrasib, to Merck's Keytruda in patients with a form of lung cancer. Early evidence suggested patients responded to the combination and, importantly, there were few elevations in liver enzymes.

The latter point is particularly important. Mirati's drug targets cancer in patients with a mutation known as G12C in their KRAS gene, a gene tied to cancer. Merck's Keytruda is a checkpoint inhibitor. Researchers had believed combining these drug classes would cause liver damage. So physicians often pair checkpoint inhibitors instead with chemotherapy and its deluge of body-battering side effects.

"While the data presented thus far are immature and largely unconfirmed, we are encouraged that the adagrasib and Keytruda regimen appears tolerable and may offer a chemo-free option for the (previously untreated patients)," SVB Securities analyst Andrew Berens said in a report to clients.

MRTX Stock: Rivaling Amgen In KRAS

With this drug, Mirati is looking to rival Amgen. Amgen sells Lumakras, another treatment for lung cancer tied to the G12C mutation in the KRAS gene. Lumakras is approved as a sole agent, but Amgen is testing the drug in combination with Keytruda for lung cancer. Amgen stock fell a fraction near 243.70.

Amgen's data, however, are "largely expected to be disappointing," Berens said. So, Mirati's fresh data release "could now be seen as an opportunity for Mirati."

The test results are very early, however. In one study, researchers could evaluate just six patients. Of those, four responded to the treatment. A second study of nine patients saw seven respond. At the median, patients are still responding after just over two months.

"Key takeaways suggest that this is a tolerable chemo-free regimen that could be at least as (effective) as checkpoint inhibitor regimens," Berens said. He has an outperform rating on MRTX stock.

Eliminating Chemotherapy

Importantly, elevations in liver enzymes were in line with adagrasib as a sole therapy, Berens said.

Eliminating chemotherapy from the treatment paradigm has benefits for patients. Chemo is harsh on the body. Think of it like a hammer, rather than a laser — it smashes everything in its path, not just the cancer. This often causes systemic problems for patients.

The results helped MRTX stock reverse a dip Monday as investors digested another test of adagrasib. That study examined the drug's potential as a sole treatment in patients with lung cancer. Then, analysts questioned whether adagrasib would differentiate itself from Amgen's Lumakras.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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