Bioterrorism has formidable foe in Corixa
Vaccine expertise gives drug company edge in fighting infections
Saturday, September 29, 2001
By MARNI LEFF
SEATTLE POST-INTELLIGENCER REPORTER
[Link from Yahoo]
Scientists in Seattle are working under government contract to develop drugs that could help protect the public against acts of bioterrorism.
Funded by a $3.5 million grant from the Department of Defense, Seattle-based Corixa Corp. may be years away from producing a marketable product. But company executives said they will suggest to the Defense Advanced Research Projects Agency next week that development be speeded up, following the Sept. 11 terrorist attacks in New York and Washington, D.C.
Corixa hopes, in part, to create a product that could be used to protect people against anthrax, a potential biological warfare agent that is widely feared. The company's stock gained more than 50 percent, to $10.50 a share, in trading this week.
"The idea would be that if there was an alert that anthrax spores were in the air somewhere else or in vicinity, or there was heightened concern about exposure, this could be administered through an inhaler or even in a nasal spray, and it would provide a window of protection," said Dr. David Persing, vice president of molecular biology for Corixa.
Corixa is working with a family of small molecules, called aminoalkyl glucosamine phosphates, or AGPs, to create compounds to ward off infections.
AGPs, Persing said, boost immune responses in the human body and could provide an effective way to prevent a variety of diseases, including anthrax.
As fear of biological warfare has become more prevalent following the terrorist attacks, so has people's curiosity about Corixa's project, Persing said.
"I think this just sort of adds a layer of interest, even within the company, and it adds urgency," Persing said. "Before, we knew it was important. Now we really know it's important."
Persing said he will propose fast-tracking the project next week, when he attends a meeting on bioterrorism near Washington.
"Washington is really kicking into action here," he said. "It's amazing to see that they're pulling people together that are virtually impossible to get together because of their busy schedules."
So far Corixa is in the earliest stages of experimenting with AGPs. After the company selects the two most effective compounds, it will conduct additional tests to measure toxicity. Then Corixa will test the compounds in primates to see whether they prevent the spread of tuberculosis.
If those experiments produce positive results, Pershing said, Corixa will deliver the compounds that it has developed to the government for tests in protecting against anthrax.
Corixa's experience in stimulating the immune system and developing drugs to protect against infectious diseases, said Thomas Dietz, an analyst with Pacific Growth Equities, make the company particularly well-suited for the project.
"Corixa has expertise in therapeutic vaccines and immune stimulation," he said. "Their vaccines are among the most widely tested in people."
That combination of factors, he said, will serve the company well in developing technology to help protect against biological agents.
But the Department of Defense contract, Dietz said, is just one small component of the company.
Corixa stands out among its peers because of its portfolio, he said. The company has 16 products in clinical trials, and 22 in preclinical testing.
"We think that they have one of the broadest pipelines in the immunotherapy industry," Dietz said.
Corixa has grown its pipeline, in part, by acquiring other companies.
Since 1999, Corixa has bought four companies to accelerate its growth.
Partnerships with other companies, particularly one with GlaxoSmithKline, have also been key in moving the company forward.
Last year, in its biggest purchase to date, Corixa bought South San Francisco-based Coulter Pharmaceutical for $570 million.
The deal gave Corixa Bexxar, a treatment for non-Hodgkin's lymphoma, which is currently being reviewed by the Food and Drug Administration.
Bexxar is likely to be Corixa's first product on the market in the United States, and it is one that Wall Street is watching very closely.
"There's a lot of uncertainty concerning Bexxar," said Brian Rye, an analyst at Raymond James & Associates, who has a "market perform" rating on the stock.
"Until that gets cleared up, that's our official stance. We see it as an outstanding investment in the long term, but because of the near-term risks associated with the story, we're taking a wait-and-see approach."
Those risks in part are tied to a delay that Corixa has experienced in pushing Bexxar through the FDA's rigorous approval process.
Initially, Corixa hoped to begin selling Bexxar this year, but in March the FDA requested additional data.
At that time several analysts, including Lehman Bros.' Michael Wood, downgraded Corixa's stock.
It slid 14 percent the day of the announcement to close at $9.50 a share, down from a high of almost $70 a share in February of 2000.
"In order to be profitable and to provide any return on equity for investors, they need to start generating revenues and make the transition from a research and development entity to a quality commercial operation," said Wood.
He added that he believes Corixa will win FDA approval for Bexxar.
Corixa announced earlier this month that it has provided the FDA with all of the additional data that the agency requested.
The next step, Chairman and Chief Executive Steven Gillis said, is appearing before an FDA advisory panel.
The panel's next meeting is in December, and Gillis said Corixa could be asked to attend, though he noted somewhat wryly that he "learned a long time ago not to put words in the FDA's mouth."
Corixa's stock has bounced around since the Bexxar delay was announced, closing yesterday at just $10.50 a share, well below the $13 a share that it sold for during Corixa's initial public offering.
Still Gillis pointed out that Corixa's stock has seen worse days -- in 1998 the company's shares sank to a low of $3.44 each.
"Obviously we're not pleased with today's market cap," Gillis said, referring to the company's market capitalization or the value of the company based on its share price and the number of shares outstanding. "But we believe in the pipeline and in the long-term value of the company in the future."
In addition to Bexxar, Corixa has several other late-stage products, including Melacine, a melanoma vaccine, approved in Canada, and PVAC, a psoriasis treatment.
Though Corixa's stock price has lagged until recent days, analysts who track it said its strong management team will guide the company forward.
Pacific Growth Equities Dietz praised Corixa's charismatic leader, who co-founded Immunex in 1981 and served as chairman and chief executive before quitting to start the company in 1994.
"Steve Gillis has had past success with Immunex," Dietz said.
"Immunex is living off the fruit of a lot of what he built, and I think this time he has an even better platform."
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