Another article (AP News) on the latest developments.
February 10, 1999
Biotech Firm Loses Half Its Value
Filed at 6:38 p.m. EST
By The Associated Press
NEW YORK (AP) -- The tiny biotech firm EntreMed will press ahead with an
experimental drug that briefly sparked hope for a cancer cure, but investors
sliced the company's value in half Wednesday after Bristol-Myers quit plans
to pay for human testing.
Analysts said late Tuesday's announcement by Bristol-Myers Squibb, the
world's largest maker of cancer drugs, cast serious doubt on angiostatin's
potential as a treatment for people with cancer.
They were also dubious about whether EntreMed, of Rockville, Md., has the
scientific and financial capability to develop the drug by itself.
''Bristol is the leading drug company in cancer in the world. If they have no
interest in the drug what does that say?,'' said Carl Gordon, an analyst with
OrbiMed Advisors.
Shares of EntreMed lost nearly half their value Wednesday on the Nasdaq
Stock Market, falling $11.62 1/2 to $12.87 1/2. That's less than a dollar
above where the stock was on the morning of May 4, the day when
angiostatin was featured in a front page article in The New York Times and
the stock soared as high as $85.
EntreMed officials say they can survive without Bristol-Myers and move
ahead with human testing. The company has $32 million in cash, and no long
term debt. But analysts said it would take $100 million or more to develop
such a drug.
Bristol-Myers had spent tens of millions researching angiostatin, a naturally
occurring human protein, after obtaining development rights from EntreMed
in 1995.
Harvard University scientist Judah Folkman gained worldwide attention last
spring when he reported that angiostatin, combined with a second EntreMed
compound called endostatin, shrunk tumors in rats by cutting off their blood
supply.
But in the ensuing months, other scientists raised questions about the
discovery, saying they could not duplicate the results of Folkman's research.
Bristol-Myers reported that it was having trouble producing angiostatin in the
laboratory and demonstrating that the drug destroyed cancer cells in rats.
Bristol-Myers now plans to focus on other anticancer agents, said
spokeswoman Peggy Ballman. The company retains development and
marketing rights for angiostatin.
But EntreMed officials say if Bristol seeks to rejoin efforts to develop
angiostatin, it will have to pay higher royalty fees.
EntreMed plans to seek Food and Drug Administration permission by year's
end to start human testing of angiostatin, and hopes to get FDA approval to
start testing endostatin even sooner, said spokeswoman Mary Sundeen. She
said the company has made advances on both drugs, which can work to
shrink tumors separately or together.
Sundeen did concede that Bristol-Myers' decision would have a short-term
impact.
''From a financing perspective, it hits us pretty hard,'' she said, adding that
''there is also a perception out there that angiostatin does not work because
Bristol Myers Squib does not want it.''
Sundeen noted that in 1996, Bristol-Myers quit research into using the
controversial drug Thalidomide to help cancer patients. EntreMed went ahead
and developed the product and licensed it to Celgene Inc., which received
FDA approval last year and has seen strong early sales.
EntreMed officials still will consult with Bristol-Myers' top scientists on
angiostatin, and will get research help from the National Cancer Institute,
Sundeen said.
But industry watchers say EntreMed faces a tough road ahead.
''It won't be easy and $30 million is not enough,'' said Viren Mehta, an
analyst with Mehta Partners in New York. ''Yet, a small focused company
willing to take a certain amount of risk can move faster than a larger
company may be able to.''
''Ultimately, EntreMed will have to take on another partner,'' said OrbiMed's
Gordon. Brostol Myers' decision ''substantially reduces the chances for
EntreMed to do it themselves.''
Bristol-Myers, which put $1.6 billion into drug development last year, said it
routinely reviews all research spending each winter.
Notably, the drugmaker also announced Wednesday that it is suspending
study of the drug lobucavir for chronic hepatitis B and herpes after studies
showed possibilities of increased drug-related tumors in rodents.
Analysts said they had hoped the drug, which was in final phase of human
testing, would generate hundreds of millions in annual sales.
Copyright 1999 The New York Times Company |
