Four Reasons to Keep Watching Biotech This Summer
By Adam Feuerstein
Senior Writer
06/04/2002 07:10 AM EDT
Summer is usually a slow time for the biotech sector. The medical meeting calendar, like the academic school year, goes on hiatus, allowing vacations and heat-induced inertia to force most market-moving news onto the back burner until fall.
Given the sickly performance of the biotech sector this year, a summer slowdown is not exactly the panacea required to spark an extended rally. But that doesn't mean investors should tune out biotechs completely for the next three months. There will be news, some of it fairly significant. Here's a quick rundown of the biggest biotech events to look out for (in between trips to the beach and waiting in line to see Spiderman for the 10th time, of course).
Will Avastin Succeed Where Other Cancer Drugs Haven't?
Genentech (DNA:NYSE - news - commentary - research - analysis) will release results from a phase III clinical study testing its experimental cancer drug, Avastin, in patients with advanced breast cancer. There is no specific date for the announcement, but results should come some time in July or August.
This will be important news for Genentech, and for biotech as a whole, because Avastin is the most advanced product in a new class of drugs designed to fight cancer by cutting off the blood supply to tumors. So far, so-called anti-angiogenesis drugs have been long on promise but short on actual results, so the upcoming Avastin data will be closely scrutinized.
Genentech has enrolled 400 patients in the study, all of whom have metastatic breast cancer that has failed to respond to previous chemotherapy. Half of the patients are receiving a combination of Avastin and the existing breast cancer drug, Xeloda, while the remaining patients receive Xeloda alone. Genentech is hoping to show that Avastin, by inhibiting the growth of blood vessels that feed tumors, will help patients live longer before their tumors start to grow again.
Avastin produced some positive results from midstage clinical studies, released last month at the annual meeting of the American Society of Clinical Oncology. The ASCO meeting also largely put to rest fears about potential safety issues associated with the drug -- namely, a higher-than-expected occurrence of blood clots.
But none of these studies get Avastin approved by the U.S. drug regulators, which is why the phase III breast cancer results are so crucial. It's been hard to get a read on the results, but Genentech has been trying to manage expectations in recent weeks. Even if the results are positive, the company is likely to wait for findings from another phase III trial in colon cancer -- due next year -- before it sends Avastin to the Food and Drug Administration for review.
Will the FDA Approve Amevive?
Last month, Biogen (BGEN:Nasdaq - news - commentary - research - analysis) received the thumbs up from an FDA advisory panel for its new psoriasis drug, Amevive. The final FDA decision should come in early August.
Can FluMist Get Past the FDA Microscope?
MedImmune (MEDI:Nasdaq - news - commentary - research - analysis) is crossing its fingers, hopeful that on or around July 10, it gets good news from the FDA on FluMist, its inhaled flu vaccine.
In July 2001, an FDA advisory panel found FluMist to be effective as a new, easy-to-use flu-prevention treatment, but some safety concerns lingered. A month later, the FDA asked MedImmune to provide additional safety data. The company responded in January, and now waits to see whether its answers are sufficient to get FluMist on the market in time for the next flu season.
A few different things can happen on July 10, when the FDA renders its decision. FluMist could simply be approved outright -- the best outcome for MedImmune. FDA regulators, however, might issue a complete response letter, which would grant FluMist conditional approval.
A "Type 1" letter is the second-best outcome for MedImmune because it only would require the company to hash out minor issues with the agency. A "Type 2" letter, however, could require MedImmune to provide a lot more data to the FDA, or even conduct additional studies. That would almost guarantee that FluMist's launch would be delayed until the 2003-04 flu season. In other words, bad news for MedImmune.
Investors, then, will need to pay close attention to what MedImmune says, or doesn't say, about the FDA decision.
Aranesp: The Choice of a New Generation?
In mid-July, the FDA is widely expected to grant approval to expand the label on Amgen's (AMGN:Nasdaq - news - commentary - research - analysis) anemia-fighting drug, Aranesp. The ruling will allow Amgen to market Aranesp to cancer patients weakened by red blood-cell loss due to chemotherapy treatments.
More importantly, Aranesp's expanded label will kick-start a marketing war with Johnson & Johnson (JNJ:NYSE - news - commentary - research - analysis) and its competing anemia drug, Procrit. The ensuing imbroglio is almost certain to play out as the drug sector's version of Coke vs. Pepsi. In this case, J&J is Coke, the old standby, while Amgen will sell Aranesp a la Pepsi -- the "choice of the new [oncology] generation."
Amgen will be pushing Aranesp's convenience -- it can be given to patients once every three weeks -- on the same schedule as most chemotherapy treatments. Procrit, by comparison, is typically administered once a week. That could be a huge advantage for Amgen.
Game over? Not quite. J&J is not going to sit still and let Amgen just abscond with its billion-dollar market. The company is conducting studies of its own to prove that Procrit also can be given less frequently. And by most accounts, the drug giant is a marketing Goliath. It's already buzzing the airwaves with Procrit TV ads, and doctors will be bombarded with calls and visits from J&J sales reps.
If Amgen wants to win, it's going to be forced to spend heavily at a time when it will be trying to digest its $16 billion purchase of Immunex. And judging by the talk among doctors at last month's ASCO convention, many are not yet entirely convinced that Aranesp's benefits are enough to switch their allegiance from Procrit. Bottom line: This is one fight still too close to call.
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