Adam Feuerstein
UBS Global Life Sciences: Day 1 Notebook
By Adam Feuerstein
Senior Writer
9/28/2004 10:53 AM EDT
URL: thestreet.com
Abgenix (ABGX:Nasdaq) didn't shed a lot of new light on development timelines for ABX-EGF, the company's EGF inhibitor cancer drug, which is partnered with Amgen (AMGN:Nasdaq) . Both companies have previously acknowledged that enrollment is slower than expected for their pivotal colon cancer study. Amgen, which is in charge of this study, has recently increased the number of enrollment sites and an FDA filing is still targeted for the end of 2005.
I think investors have largely discounted ABX-EGF as a colon cancer treatment, especially monotherapy, because ImClone Systems (IMCL:Nasdaq) is already there with Erbitux and well ahead. (Last week, there was even talk of the Erbitux sales ramp beginning to slow, which if true, certainly doesn't bode well for ABX-EGF if and when it launches.)
Abgenix and Amgen are looking at ABX-EGF in combination with chemotherapy for earlier-stage colon cancer patients, which is a bigger market. One hurdle here is ImClone's patent estate on combination treatments using an EGF inhibitor. Monday morning, Abgenix executives said they didn't believe these patents are valid and will be overturned on challenge.
The other possible advantage for ABX-EGF is that it is being dosed every other week for colon cancer patients, compared to weekly dosing for Erbitux. This more convenient dosing schedule, coupled with a better safety profile, may give it a positive differentiation in the market. But there isn't much early-to-midstage patient data on ABX-EGF with every other week dosing, so this could also be seen as a risk.
Looking forward, Abgenix is testing ABX-EGF in lung and kidney cancer patients, and we should see some new clinical data in early 2005. (Preliminary lung cancer data at last year's ASCO conference was pretty good.) At the end of October at a medical meeting, the company will also be presenting some very preliminary data (just 19 patients) on ABX-EGF plus chemo in colon cancer patients.
BioMarin's Orapred Problem
BioMarin Pharmaceutical's (BMRN:NYSE) breakout session was a bit tense, which is no surprise given last week's lowered financial guidance due to higher-than-expected inventory levels of the asthma drug Orapred.
Acting CEO Lou Drapeau was on the firing line Monday morning, with most of the questions dealing with how BioMarin found itself in this mess and what it's doing to get out of it. While he didn't come out and say it explicitly, Drapeau certainly hinted that BioMarin was not given the full and truthful picture of Orapred's inventory levels during due diligence with Medicis Pharmaceutical (MRX:NYSE) , which sold the Orapred business to BioMarin in May.
BioMarin is currently huddling with its lawyers to see if the company can seek some sort of financial remedy from Medicis, Drapeau said. BioMarin would seem to be in a good position, since under the acquisition terms, BioMarin is paying for the Orapred business over time. Conceivably, BioMarin could withhold future payments to Medicis until this situation is figured out. Drapeau said the company will make public its plan in the fourth quarter.
Meantime, BioMarin is taking immediate steps to reduce its cash burn in order to minimize the disruption caused by the excess Orapred inventory. Drapeau reiterated the guidance for no Orapred sales in the second half of 2004, but at the same time, he said this was a worst-case scenario and the company's rough estimate is that there are four months of Orapred inventory in the channel, compared to a normal level of one to two months. This certainly makes it possible for BioMarin to work down the Orapred inventory enough to generate additional sales this year.
Some other notes: At some point, probably next year, BioMarin will also be forced to raise additional cash, Drapeau said. He also stated that relations with Genzyme (GENZ:Nasdaq) (BioMarin's partner for the rare genetic disease drug Aldurazyme) were "much improved" since former BioMarin CEO Fred Price resigned. There were also a few questions about whether or not BioMarin would be amenable to a takeout, to which Drapeau replied: "If the price is right, we'd be amenable to anyone buying us."
Cell Therapeutics Needs to Prove Itself
Cell Therapeutics' (CTIC:Nasdaq) CEO Jim Bianco was not at the conference; instead the presentation was made by Operations Chief Steve Aselage. The message, however, was pretty much the same: The company is still pleased that lung cancer patients in the Stellar 3 study of its cancer drug Xyotax seem to be living longer than expected. The data is blinded to the company, of course, so Aselage cannot say whether patients on Xyotax are living longer than patients in the control arm. But again, the company is optimistic and expects to have data for analysis in early 2005.
As I've explained in detail before, this view is being taken with a fairly large grain of salt by investors. Cell Therapeutics continues to be a show-me story.
Celgene's Sell Job
Celgene (CELG:Nasdaq) failed to offer a lot new. The company reiterated its intention to seek marketing approval for Revlimid in late 2004 or early 2005 for the treatment of myelodysplastic syndrome, a cancer-like bone marrow disease. Specifically, the filing will be for use of Revlimid to treat MDS patients with so-called "5 q minus" chromosomal abnormalities, which represents a small subgroup of MDS patients with disease that progresses slowly.
While getting Revlimid approved for MDS will be nice for Celgene, the real prize is Revlimid use in multiple myeloma, a blood cancer. It's a fairly open secret that Celgene is rushing ahead with a Revlimid filing for MDS to get the drug approved quickly so it can then be used off label by doctors to treat multiple myeloma. Of course, Celgene won't acknowledge this fact because it is not allowed to promote a drug off label.
The knock on this strategy, according to Celgene's critics, is that patients with the 5 q minus form of MDS are relatively healthy and typically treated effectively with blood transfusions or red blood cell-boosting drugs like Procrit. Therefore, there is no urgent need for the FDA to approve Revlimid in this indication -- or at least not as urgent a need as Celgene likes investors to believe. And if Revlimid approval in MDS is delayed, expected off-label sales of the drug in the more lucrative multiple myeloma market will also be pushed back.
Onyx's Filing
When will Onyx Pharmaceuticals (ONXX:Nasdaq) and partner Bayer (BAY:NYSE) seek FDA approval for its kidney cancer drug BAY 43-9006?
Will it be in the first half of 2005? The second half of 2005? Later? And will Bay 43-9006 make it to the FDA before Pfizer (PFE:NYSE) files its competing drug? These questions have been hanging over Onyx (and depressing its stock price) since last spring. There were no clear answers Monday. Onyx says it will wait for final results from its phase II study before determining whether the data is strong enough to file early. If not, the company will wait for data from its ongoing phase III study. One way or the other, Onyx will let investors know by the end of the year.
I'll deliver a daily report like this on each day of the conference as well as any bigger stories that present themselves. |
