Cell Therapeutics buys drug shown to shrink tumors
Last updated December 27, 2007 8:30 p.m. PT
By JOSEPH TARTAKOFF
P-I REPORTER
Cell Therapeutics Inc. of Seattle said Thursday that it had closed on a deal to buy Zevalin, a drug for non-Hodgkin's lymphoma that has been shown to be highly effective at shrinking tumors but has had its sales stymied by regulatory and logistical issues.
A study released this month showed that Zevalin, given after chemotherapy, kept cancer from progressing for a longer period than chemotherapy alone, while other studies have shown that the drug is more effective at shrinking tumors than Rituxan, the standard treatment for non-Hodgkin's lymphoma.
"Given the impressive clinical data, you would think it would have had greater sales," said James Bianco, the CEO of Cell Therapeutics.
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But Bianco said that factors outside the control of the drug's former owner, Cambridge, Mass.-based Biogen Idec Inc., had limited the drug's acceptance since its 2002 launch. Even when Biogen Idec cut back Zevalin's sales force this year, the drug's sales didn't fall but stayed steady at roughly $16 million, he said.
Bianco said that several recent developments, in addition to the new study, could allow Zevalin sales to now grow under Cell Therapeutics' watch.
Zevalin is a radioimmunotherapy -- it delivers a radioactive antibody directly to a cancer cell -- and therefore it can be administered only at a select number of clinics with licenses and specialists. That has limited the drug's availability beyond the hospital setting, which currently accounts for about 70 percent of its sales. Fewer than 1,000 patients receive Zevalin each year.
But Bianco said that Biogen Idec had worked to make it easier for free-standing clinics to handle Zevalin, a process that Cell Therapeutics will continue.
In addition, he said, an increasing number of clinics have nuclear medicine physicians on staff who can administer the drug.
Zevalin's sales have also been stunted, he said, because Medicare has made it "cumbersome" for hospitals to get reimbursed for the drug.
Already the regulatory environment is clearing up somewhat.
In November, Medicare announced that it would cut back on its reimbursements of radioimmunotherapies, such as Zevalin, which can cost more than $20,000 to administer. An uproar ensued, and last week Congress passed legislation extending the previous reimbursement arrangement for six months.
Manufacturers and policymakers will now work together to come up with a new reimbursement structure.
"Our initial strategy is to lower and remove the barriers that made Zevalin less attractive to use in the past," Bianco said.
The acquisition is part of an effort by Cell Therapeutics to become profitable by 2010, Bianco said. He said it was possible that other drugs the company is developing, including Xyotax, a lung cancer drug, could be on the market by then.
In the meantime, Bianco said during a conference call with analysts Thursday morning, "it feels good to have a product that will generate revenue for the company."
Cell Therapeutics paid $10 million to Biogen Idec to market, sell and develop Zevalin. The company will also pay Biogen Idec royalties on Zevalin's sales through at least 2015. If the FDA approves the drug for other uses, Cell Therapeutics could end up paying Biogen an additional $20 million.
On the Nasdaq market, Cell Therapeutics' stock bumped up about 2 percent, or 4 cents, to close at $1.89. Cell Therapeutics announced in August that it would buy Zevalin. |
