#3
Idec Pharmaceuticals (IDPH; $33.93;
C-2-9)
Volatility Risk: High
EPS (Dec): 2001A $0.59; 2002E $0.80; 2003E $1.07
P/E (Dec): 2001A 57.5x; 2002E 42.4x; 2003E 31.7x
• Yesterday, the oncologic drug advisory committee
(ODAC) voted in support of Bexxar’s clinical benefit
in both Rituxan refractory patients and in
chemotherapy refractory, low grade (LG) or follicular
NHL patients. As the timing of an approval for
Bexxar is still uncertain due to potential
manufacturing issues, we are leaving our Zevalin and
earnings estimates unchanged.
• The panel’s main concerns centered on the lack of
controlled data versus existing therapies, a suggestion
of high rates of myelodysplastic syndrome and
leukemia and high rates of HAMA. However, the
panel appeared to be swayed by high response rates in
heavily pretreated patients and the long durations of
response.
• ODAC voted 10-3 in favor of Bexxar on whether the
drug’s data supported substantial evidence of a
clinical benefit in Rituxan refractory patients. In a
second question of whether the data from the Bexxar
studies were likely to predict a clinical benefit in
chemotherapy refractory LG or follicular NHL
patients with or without transformed disease, ODAC
voted 13-0 in favor of a Bexxar benefit.
• In a third question regarding the use of Bexxar, based
on existing data, over existing therapies (including
Zevalin) there was no formal vote, however the panel
consensus was that there was no data to support the
use of Bexxar over existing treatment regimens.
• There are 3 studies either underway or soon to begin
that should address the lack of controlled data for
Bexxar and help elucidate what patient population
could benefit from therapy: 1) CHOP vs. CHOP +
Rituxan vs. CHOP followed by Bexxar, which is
currently underway; 2) Bexxar vs. Rituxan in patients
treated with a prior chemo regimen; 3) Bexxar vs.
Zevalin in Rituxan refractory patients.
• Under our worst case scenario assumption, which
includes a Bexxar approval by its May 2, 2003
PDUFA date, we believe that our 2003 Zevalin sales
estimate would be affected by less than $5 MM and
our 2003 EPS estimate would only be impacted by
$0.01. We believe that Bexxar will take most share
from Zevalin in the low grade refractory setting, as the
HAMA rates are too high for Bexxar to gain
significant use in the frontline (60% HAMA in its
only frontline study). In addition, as Bexxar is more
complicated to administer than Zevalin due to the
dosimetry required, we believe that most use will be
relegated to the academic setting, limiting Bexxar’s
market. Ultimately, we expect Bexxar to account for
about 20-25% of the radioimmunotherapy market, but
also expand the market by 10-15%.
Importantly, we are not changing any estimates for
IDEC as we await clarity on the timing of a Bexxar
approval. With Rituxan sales growth beginning to
slow and the pipeline still early, the stock price has
become increasingly dependent on Zevalin sales,
which we believe could be slow to develop. We
maintain our Neutral rating.
E. Ende) |
