Analysis by Investor's Business Daily-June 8th, 1998...FYI...
The New America
COST CURE
Cytoclonal Devises Cheap Way To Make Potent Cancer Drug
By Mathew Benjamin
Investor's Business Daily
Although experimental cancer drugs have stolen the spotlight in recent weeks, several treatments already on the market are producing equally eye-catching results.
One such drug, Taxol, has proved effective in treating several types of cancer. In fact, a recent study found that adding the drug to standard chemotherapy improved breast cancer patients' survival rates by 26%.
But Taxol's active ingredient, paclitaxel, is found only in minute quantities in the Pacific yew tree of the Northwest and is expensive to make.
And that cost is passed on to patients, who routinely pay $20,000 to $30,000 for Taxol treatment. That's three to four times the price of standard chemotherapy.
Cytoclonal Pharmaceutics Inc. is betting it can win a chunk of the $1 billion market for Taxol by making paclitaxel much more cheaply.
Taxol was developed jointly by the National Cancer Institute and drug giant Bristol-Myers Squibb Co. It won market clearance in '92.
Extracting the compound from the slow-growing yew tree is a painstak-ing process. It takes the bark of several trees to treat a single patient. What's more, the yew is endangered, and is a home of the northern spotted owl.
In '91, Cytoclonal won the license to create paclitaxel from a fungus found on the yew tree. Since then, the Dallas-based company has spent about $16 million developing the process, which involves growing large quantities of the fungus in a lab through fermentation.
Microbial fermentation is one of the most cost-effective ways to make drugs, such as antibiotics. Cytoclonal estimates that could boost production of paclitaxel 2,000-fold.
The company has since gained two broad patents giving it exclusive rights to the fermentation
"We feel we're in an exciting position to bring this process further as a major contribution to the field of oncology," said Dr. Arthur Bollon, Cytoclonal's founder and CEO.
Cytoclonal's drug could win Food and Drug Administration approval by late this year or early '99, according to Ray Dirks Research, a unit of National Securities Corp. in New York.
The potential for the drug is huge. Bristol-Myers' sales of Taxol topped $940 million last year, up from $345 million in '94.
That rapid growth is due largely to newly approved uses for the drug. Originally cleared only for ovarian cancer, it's now used to treat breast cancer and AIDS-related Kaposi's sarcoma. And approval is pending to use it as a treatment for lung cancer.
Breast cancer alone will strike more than 180,000 Americans this year, and will claim more than 43,000 lives, the American Cancer Society estimates. Lung cancer is expected to strike 171,000 Americans.
Cytoclonal is gearing up for market approval. It's already signed a deal with Hamburg, Germany-based Helm AG to sell the prod-uct in Europe.
As for the U.S., "The company is in negotiations for potential com-mercialization of the product," Bollon said. That deal, which may be announced as soon as this week, could in-volve licensing the drug to Bristol-Myers or a rival.
Jeff Berg, of M.H. Myerson & Co., said getting a name brand, corporate client for its product is probably the final hurdle for Cytoclonal.
The company faces some stiff competition, though.
Bristol-Myers is trying to stream-line its production of the drug through the use of yew-tree cell cultures, but that process is also difficult and costly.
Immunex Corp. filed last November for clearance to market its own version of the drug. Hauser, Inc. produces Taxol for Immunex by using standard extraction methods.
And Rhone Poulenc Rorer Inc., a unit of France's Rhone Poulene SA, markets a similar drug called Taximeter, which costs about the same as Taxol.
Meanwhile, Cytoclonal is re-searching new uses for the drug. It's currently working on a Taxol treat-ment for polycystic kidney disease, which afflicts 500,000 Americans and 5 million people worldwide.
The company also has isolated genes related to certain types of lung and skin cancer. The genes could potentially be used to deliver Taxol directly to targeted areas, reducing side effects. In '96, Cytoclonal paten-ted the use of the lung-cancer gene to deliver Taxol.
In the first quarter, the company lost 10 cents a share, the same loss it reported a year before. The Development-stage Company had no reve-nue. Cytoclonal trades as CYPH near 12 3/4. |
