Cell Genesys Shares Continue Climb

The stock rose 48 cents, or 22 percent, to $2.88 in afternoon trading. On Friday, shares gained 19.7 percent after midstage study results were announced.

"We continue to believe that Cell Genesys is undervalued and has not benefited from the continuous and striking positive clinical data flow to date," said Canaccord Adams analyst Joseph Pantginis, who reaffirmed a "Buy" rating with a $7.70 price target.

On Friday, the company said its GVAX vaccine both invoked an immune response and extended the survival rate of those patients to 43 months, on average. Patients who didn't have an immune response lived for an average of 21 months.

The Food and Drug Administration has yet to approve a cancer vaccine.

Pantginis said the company seems to have accomplished a key goal of simulating the immune system to fight tumors. Also, the drug would likely beat out its competitor Provenge, being developed by Dendreon Corp., based on cost and effectiveness issues.

"Regarding last week's immunological data from both companies, we believe Cell Genesys knocked it out of the park, showing a distinct correlation between specific antigens and survival," he said.

Dendreon reported data showing a general immune response, he said. So far, study subjects taking Provenge have shown a median survival rate of 25.2 months while those taking GVAX have shown a 35 month survival rate, he noted.

He also said that if current late-stage study data on Provenge, set for release in the second half of 2008, turns out to be negative, the company may not be able to recover. Meanwhile, Cell Genesys already has the manufacturing capacity in place for GVAX, while Dendreon has been struggling.

Shares of Dendreon fell 16 cents, or 2.8 percent, to $5.70.