Corixa turned back by FDA
By Luke Timmerman
Seattle Times business reporter
Thursday, March 14, 2002, 12:00 a.m. Pacific
Corixa has staked its future on a treatment for the fifth-most common form of cancer in the U.S., and it thought it had done everything right to win approval for the market.
But the U.S. Food and Drug Administration disagrees. The agency informed Corixa late Tuesday that Bexxar, its drug for non-Hodgkin's lymphoma, isn't showing enough proof that it's safe and effective. That word came a year after the FDA asked Corixa for more information on the safety and effectiveness of the drug.
The FDA also went a step further, saying that if the Seattle biotech company chooses to keep trying, it will need to do more clinical trials to prove Bexxar's worth. That would cost the company millions.
The news wasn't an absolute rejection of Bexxar, but the markets treated it like one. The company's stock fell 36 percent yesterday to $6.15 a share, making it yesterday's single biggest decliner on the Nasdaq.
Andrew Heyward, an analyst with Ragen MacKenzie and longtime Corixa booster, said he thinks the company still has a shot in the smaller European market, but "I don't think you can invest in Corixa thinking Bexxar will get on the U.S. market."
Corixa Chairman and Chief Executive Steve Gillis could not be reached for comment yesterday, but said in a statement, "We are extremely disappointed."
"He's definitely frustrated, I think, exasperated," said Heyward, who spoke with Gillis yesterday. "Clearly, the company was expecting to hear something else based on their discussions with the FDA."
Corixa spent the day informing employees and calculating its next move. Spokesman Jim DeNike said the company has four choices: amend the application within 10 days, notify the agency within 10 days of its intent to amend, request a hearing on whether there are grounds to reject Bexxar, or withdraw the application. No decision has yet been made, DeNike said.
The news came three weeks after the FDA approved Zevalin, a rival drug from Idec Pharmaceuticals. The drugs work similarly: Both use antibodies packed with radiation to zero in on tumor cells and kill them.
How well Corixa recovers is a matter of speculation, analysts said. By biotechnology standards, it has an unusually large pipeline of 18 experimental drugs, including six in pivotal clinical testing.
Corixa says it can survive, and DeNike said no decisions have been made about cutting jobs or operations.
At year's end, Corixa had $121 million in cash and a $75 million line of available credit. This year it is expecting revenue of $65 million to $75 million, operating expenses of $145 million to $155 million, and a net loss of $80 million to $95 million.
Corixa has clinical-trial data covering more than 10 years and 600 patients who have been studied with Bexxar, but it didn't do all the trials itself.
Corixa acquired the drug in late 2000 when it bought South San Francisco-based Coulter Pharmaceutical for $900 million in stock. In a pivotal clinical trial with 60 patients, Corixa said 20 percent of patients with non-Hodgkin's lymphoma had complete responses, compared with 2 percent who had chemotherapy.
Paul Latta, an analyst with McAdams Wright Ragen, said Corixa will be able to lean on its numerous partnerships with big pharmaceutical companies to cushion the blow of a possible Bexxar failure.
Last year, Corixa also had two other significant setbacks. Clinical studies for PVAC, a treatment for psoriasis, fell short of showing statistically significant benefit. And clinical data for Melacine, a treatment for melanoma, showed it did not have statistically significant benefit for all patients but did show improvement in people with specific genes. Melacine is approved for the market in Canada, and last month it got a green light for a revised pivotal trial.
Corixa isn't giving up.
DeNike said the FDA's letter was vague, and the company is looking for a more clear response.
"We believed we had put together a package of material that demonstrated our product was safe and effective," DeNike said. "Obviously, the FDA has a different opinion."
Luke Timmerman can be reached at 206-515-5644 or ltimmerman@seattletimes.com. |
