Heard On The Street: Small Stocks With Cancer Projects Lure Funds
Dow Jones Online News, Thursday, May 07, 1998 at 00:22
(Published on Wednesday, May 06, 1998 at 21:14)
By Michael Waldholz, Staff Reporter of The Wall Street Journal
The investor frenzy this week over news of promising treatments that
eradicated tumors in mice has sent Wall Street hunting for other
small-stock companies whose innovative but little-known efforts to
attack tumors may be equally impressive.
But, science researchers and savvy analysts say that while there are
many other fascinating projects in the works, they expect investor
enthusiasm to wane as it becomes clear that all the projects face large
challenges before they become useful treatments.
Investors sent shares of the previously obscure and thinly traded
EntreMed Inc. into a high-altitude roller-coaster ride on the Nasdaq
Stock Market following a report in the New York Times that two of its
experimental drugs eradicated tumors in laboratory mice and that human
tests of the drugs might begin in a year or so.
All week, many cancer experts, and even the company and its
scientists, tried to calm public excitement by saying the research is
much too early to speculate whether it will work as well in people. And
Wednesday EntreMed shares cooled a bit for the second day, closing down
28%, or $12, to $31.125 after having jumped on Monday to as high as $85
from about $12, before closing that day at $51.8125.
But securities analysts and cancer scientists, as well as publicity
machines cranking out news releases all week for other small
biotechnology companies, were quick to note that there are perhaps two
dozen or more small and large-sized drug makers pursuing tumor-fighting
agents that are as impressive as those produced by EntreMed.
Some of these companies have already conducted animal tests of their
experimental therapies, and others are already trying out their products
in early human trials. Like EntreMed's agents that kill tumors by
cutting off their blood supply, the other companies are employing
strategies that also are intriguing, unusual and daring, especially
since they all use methods that significantly differ from standard
chemotherapy or radiation, which can often produce side effects as
troubling as the disease.
"There are many promising efforts (against cancer) going on in
numerous biotechnology companies these days," said Viren Mehta, a
biotech analyst with Mehta Partners, New York. "But experience teaches
us no single product from any one company is likely to be a magic bullet
against this disease. None of the companies' shares should be treated
the way EntreMed's have been this week."
Cancer scientists say, for instance, there are about a dozen
companies deep into efforts, like EntreMed, to make drugs that choke off
a tumor's blood supply, a technique called anti-angiogenesis. The notion
of fighting cancer this way was originally developed several decades ago
by Judah Folkman, a researcher at Children's Hospital in Boston whose
lab in the last five years discovered the drugs being developed by
EntreMed. And several companies, including the Japanese drug maker
Takeda Pharmaceuticals and Abbott Laboratories of the U.S., are testing
some early anti-angiogenesis substances identified by Dr. Folkman and
others in the field.
In addition, Genentech Inc., Agouron Pharmaceuticals Inc., Ribozyme
Pharmaceuticals Inc., Magainin Pharmaceuticals Inc., and Sugen Inc. are
in early human testing of therapies with dramatic effects against tumors
in animals by blocking blood vessels. But, as with EntreMed's two drugs,
no one believes any of these products are a sure-bet to become
successful anti-cancer agents anytime soon. Abbott and Takeda are too
large for a cancer product success to significantly affect their future
earnings growth.
And there are a host of tiny biotech companies testing agents in
humans that use other techniques that have wiped out tumors in lab
rodents. These companies include Antigenics, a closely held New York
company, as well as Targeted Genetics, Vical Pharmaceuticals and Imclone
Systems.
In an interview Wednesday, Dr. Folkman reiterated that much work
needs to be done on the two EntreMed vessel-blockers, called angiostatin
and endostatin. He said that since Sunday, his lab has been flooded with
calls from cancer patients, their families and doctors asking when the
drugs will be available.
Although Dr. Folkman's lab discovered the natural proteins that may
someday be turned into the EntreMed drugs, he says he isn't involved in
scaling up their production, nor does he know when all-important
toxicology studies will be done in primates.
EntreMed acquired the rights to develop Dr. Folkman's discoveries in
1991 when the then private venture firm gave Children's Hospital a
grant. "We went to big and small companies looking for the money we
needed to expand our research and EntreMed was the one to help us out,"
Dr. Folkman said, noting he owns no stake in the company.
In April, the 65-year-old Dr. Folkman joined the board of Johnson &
Johnson. He said his lab has since discovered four other unnamed
vessel-blocking agents that may be even more potent than the two being
developed by EntreMed. He said no company has the rights to develop
these.
Dr. Folkman said he was especially interested in vessel-blockers
developed by Genentech. The San Francisco biotech company has created a
synthetic antibody that disables a natural vessel-growing protein
produced in the body called VEGF. A safety study of Genentech's
anti-VEGF in about 25 patients will be presented at an American Society
of Clinical Oncologists science meeting May 18 in Los Angeles. A company
spokesman said rodent studies had shown the product was able to
significantly reduce tumors, and it already is planning larger studies
in prostate cancer patients.
Another company with still another approach to blocking tumor blood
vessels is Ribozyme of Boulder, Colo. The company has developed small
molecules that block VEGF activity. Ralph Christoffersen, Ribozyme's
president, said his company's products reduced tumor size in rodents by
75%. He hopes his drug will be effective in halting tumor growth in
patients, thereby extending lives and turning cancer into a "manageable
disease."
But cancer scientists said other companies pursuing other techniques
also have recently produced intriguing results. One company, closely
held Antigenics in New York, is testing an all-purpose tumor fighter
that works by triggering the body's immune system to destroy cancer
cells. The technique is based on a discovery of so-called heat shock
proteins by Pramod Srivastava of the University of Connecticut that can
be used to disable a tumor's ability to fend off immune system cells. In
animal tests reported in the journal Science last year, Antigenics
reported that the therapy knocked out tumors against 14 types of cancer
in lab rodents. Two top cancer centers are now testing the products in
cancers of the pancreas and kidney.
Copyright (c) 1998 Dow Jones & Company, Inc. |
