Feeling Corixa's Pain
Matthew Herper [Forbes], 03.26.02, 11:52 AM ET
Steven Gillis is a biotechnology veteran, having cofounded Immunex when he was in his twenties. Two decades later, Immunex is one of the world's most successful biotechnology companies. The same cannot be said, however, for his current effort, Corixa, which is trying to develop cancer vaccines that could be used as an alternative to chemotherapy. The company's stock is trading under $7, more than two-thirds off its 52-week high of $22.50.
Gillis tried to fill gaps in Corixa's (nyse: CRXA - news - people) pipeline through acquisitions. One of these products, Bexxar, was supposed to be almost ready when Corixa bought it as part of its purchase of Coulter Pharmaceutical. Instead, the drug, an antibody that delivers doses of radiation therapy directly to cancer cells, has languished with regulators at the Food and Drug Administration for nearly two years. Corixa and its collaborator on Bexxar, GlaxoSmithKline (nyse: GSK - news - people), hope to meet with regulators within the next 45 days to discuss their options--again.
"Obviously, we thought when we acquired Coulter that this product would be approved last year," Gillis says. But instead of this approval, they got complicated instructions from the FDA. "We sent them a pile of additional clinical studies," Gillis says. In the meantime, a similar drug from IDEC Pharmaceuticals (nasdaq: IDPH - news - people) reached the market. Gillis is still stuck on one of those sentences that biotech investors dread: "We need to understand what we need to do to get this product approved."
At this point, investors could be forgiven for thinking Gillis would know by now. He and fellow laboratory scientist Christopher Henney founded Immunex (nasdaq: IMNX - news - people)in 1981 and stuck around for its first few drug approvals. Even though Gillis, a bearish man who still has the bearing and dress of an academic, left before Immunex's biggest drug, Enbrel, for rheumatoid arthritis, hit the market, he says, "When I left I knew Enbrel was going to be approved."
Apparently, experience doesn't count for everything: Aside from Gillis' problems with Bexxar, Henney is steering his current company, Dendreon (nasdaq: DNDN - news - people), out of some recent disappointments over a prostate cancer vaccine.
Have drug approvals just gotten more difficult? "It certainly hasn't gotten any easier, that's for sure," says Gillis. "The agency remains overworked--there's a tremendous number of drug applications they have to deal with."
For Corixa, the biggest recent bright spot is not a drug, but a proposed diagnostic test for breast cancer that the company is developing with Ortho-Clinical Diagnostics, a unit of Johnson & Johnson (nyse: JNJ - news - people). "This would be a new test that would be far more sensitive than anything that's out there to see if a tumor has returned," Gillis says. The project sprang out of Corixa's ongoing vaccine discovery projects--some of them acquired through the acquisition of Ribi Immunochem in 1999.
Cancer vaccines attempt to train the immune system to identify cancer cells by the genes they are over-expressing, and then destroy them. "Ortho's developed a technology that allows them to capture cells in the blood stream that shouldn't be there," Gillis says. The new test would identify cells that over-expressed three genes Corixa discovered while trying to develop a breast cancer vaccine. In theory, the resulting blood test could be used in conjunction with mammograms to detect breast cancer with very high accuracy.
But fancy diagnostic tests won't make as much revenue as a good drug. If Bexxar totally flames out, Corixa might still get some money from IDEC, which it says is infringing upon a Bexxar patent. After that, the next product in the pipeline is Melacine, another cancer vaccine, which came with Ribi Immunochem. |
