From the September 30, 2005 print edition
Geron betting on cancer vaccine
Competition tough in battle against killer
Lynn Graebner
For a century, scientists have been seeking a vaccine to stimulate the human immune system to fight cancer.
Now, as biotech companies get closer to therapies that may work, large pharmaceutical companies are starting to take notice.
Menlo Park-based Geron Corp., one of a handful of publicly traded biotechnology companies with experimental cancer vaccines in clinical trials, generated enough interest among investors to raise $80.1 million dollars on Sept. 21 despite the fact it has no approved product on the market.
In addition to Geron raising $62.1 million in a common stock offering, pharmaceutical giant Merck & Co. Inc. exercised a warrant to buy 2 million shares of the biotech firm for $18 million in conjunction with the stock offering.
"There's a little more light coming back into cancer vaccines," says Joseph Pantginis, vice president of equity research for investment banking firm Adams Harkness Inc. of New York, N.Y. Adams makes a market in cancer vaccine companies Cell Genesys Inc. of South San Francisco and CancerVax Corp. of Carlsbad, but not Geron.
While there are no cancer vaccines on the market yet, there is some positive data from clinical trials pointing to their potential, he says.
Geron is only in the first and second of three phases of clinical trials with its Telomerase cancer vaccine. But the company has had some positive data so far and Merck likes what it sees. Merck has its own cancer vaccine studies under way and the two companies have agreed to collaborate.
Reni Benjamin, senior biotechnology analyst for investment bank Rodman & Renshaw LLC of New York, N.Y., sees no downside to the Merck deal. If Merck pulls out, Geron gets all the rights back to the technology and if the technology succeeds, Geron gets paid. He figures Geron has about $200 million in cash, which should keep it funded for about four years.
Rodman has does some investment banking for Geron and makes a market in its stock but Mr. Benjamin does not personally own Geron stock.
His company covers Geron and New York-based Antigenics Inc., which has cancer vaccines in development targeting kidney and skin cancer and leukemia and genital herpes. But Mr. Benjamin thinks that Dendreon Corp. of Seattle, Wash., has the most likely shot at being first to market.
Dendreon recently said it will submit its immunotherapy product for treating prostate cancer to the U.S. Food and Drug Administration in 2006.
Dendreon has four separate final phase three clinical trials involving the company's therapeutic cancer vaccine Provenge. Ironically, the trial that generated the data that Dendreon intends to submit to FDA for approval actually failed to meet its primary goal of slowing tumor progression. But the fact that it extended the lives of late-stage prostate cancer patients 2.1 months beyond the current standard chemotherapy treatment and that patients suffered much fewer and less severe side effects, is enough to prompt the company to attempt to get it approved. And in a preapproval meeting with the FDA that agency indicated that the data was sufficient for the company to apply for approval, says Monique Greer, a Dendreon spokeswoman.
Part of the difficulty with testing experimental drugs is that they can only be ethically tested on patients who have exhausted all other proven treatments. in these cases usually the cancer has progressed to the point that no therapy will have much of an effect. Dendreon has advanced its vaccine to the point that it has been allowed to enroll 170 men with early-stage prostate cancer in a Provenge clinical trial and Dendreon expects data from that trial to be available in the first half of 2006. While the company can't speculate on the outcome, biotechnology companies often expect better outcomes in patients the earlier they are treated.
Although there are not a lot of big pharmaceutical or biotechnology companies partnering with smaller cancer vaccine companies, there was at least one other major deal done in December 2004 between CancerVax Corp. of Carlsbad and Serono International SA a biotech firm in Geneva. CancerVax is studying its vaccine Canvaxin on stage three melanoma patients. Serono agreed to pay CancerVax $37 million plus up to $253 million more if the vaccine progresses.
There's a race on to see who will be first to market. Some analysts say it could be within the next couple of years. Others say it may take until 2010. But most agree the science is maturing.
"It's just a matter of time until someone gets one to work," says Alex Hittle, an analyst with A.G. Edwards Inc. of St. Louis. But the first company to succeed won't knock all the other companies out of the market, he says.
And the ways in which companies are trying to get cancer vaccines to stimulate the immune system are different enough that there's plenty of room for many companies, says Mr. Benjamin. It will only take one successful vaccine getting to market to reinvigorate Wall Street's interest in cancer vaccines, Mr. Benjamin says.
"If one of them makes it, they all make it."
Lynn Graebner covers nonprofits and life sciences for the Business Journal. Reach her at (408)299-1822. |
