The two biggest biotech companies, Genentech (DNA) and Amgen (NASDAQ:AMGN), released negative news that caused their shares to fall sharply (see story). The drop was enough to put all of biotech lower on a day when the general market was positive.
Genentech announced that it stopped a small trial of Avastin when two patients developed a disorder in the digestive tract, which was fatal to one of them. Another patient also died, but the cause for that death is not clear. Only 29 patients were originally participating in the trial, and 18 of them were still involved.
In the trial, Avastin was being given to patients with small-cell lung cancer, along with chemotherapy and radiation. Avastin is approved for a different lung cancer disease, non-small cell lung cancer, but radiation is not part of the regimen. Genentech officials do not know whether the combination of radiation and Avastin caused the problems or whether the problems came from the disease itself.
Genentech also reported that Q1 U.S. sales will be about the same as the figure recorded in Q4 of last year, which was less than analysts expected. For the full year of 2007, Genentech is sticking to its predication that earnings per share will grow 25%, and that they will continue to grow at a 25% annual compound rate through 2010. It also increased by 50% the number of molecules it expects to have in development in 2010. Genentech was down 3.2%, falling $2.74 to $82.34.
For its part, Amgen stopped a trial of Vectibix as a first-line treatment for metastatic colorectal cancer. Vectibix was being given as an adjunct to Avastin (from Genentech) and chemotherapy. In an interim analysis, it was found that the progression-free survival time was shorter in the Vectibix arm. Although Vectibix is approved as a second-line treatment for colorectal cancer, it would like to have first-line status, and it is continuing a trial as a first-line therapy as an adjunct to chemotherapy, but without Avastin. Amgen dropped $2.39 to $58.08. a loss of 4%. The news was good for ImClone (IMCL), which rose $4.60 to $38.49, a gain of 14%. Erbitux, ImClone’s second-line drug for colorectal cancer, competes directly with Vectibix.
Celgene (NASDAQ:CELG) received a recommendation for approval of Revlimid in Europe. The drug would be indicated for patients with multiple myeloma who have received at least one prior drug regimen, and it would be administered as an adjunct to dexamethasone.
Charles River Labs (NYSE:CRL), a medical research and services company, will establish a presence in China by forming a joint venture with Shanghai BioExplorer, which provides early-stage drug development services. As part of the venture, Charles River will build a 50,000 square foot facility in Shanghai. The new facility will open in mid-2008.
Hana Biosciences (HNAB) has decided to stop pursuing a Special Protocol Assessment for its drug Marqibo, a drug for leukemia and non-Hodgkin’s lymphoma. Also, together with its partner NovaDel Pharma (NVD), Hana will switch to the European formulation of Zensana, an oral spray used to treat nausea and vomiting from chemotherapy. The previous U.S. version was found to have manufacturing problems. The two companies will submit the new version to the FDA for approval in 2008. The news took a bite out of Hana, which fell 35%. It was off $1.80 at $2.42.
Gilead (NASDAQ:GILD) reported that its partner GlaxoSmithKline (NYSE:GSK) received a recommendation for approval in Europe of ambrisentan for pulmonary arterial hypertension [PAH]. The recommendation will trigger a milestone for Gilead. Ambrisentan is an endothelin receptor antagonist. In the U.S., where Gilead retains the rights to the drug, ambrisentan is under review at the FDA, with an action date of June 18, 2007.
Pozen (NASDAQ:POZN) said the FDA accepted its amended response to an approvable letter for Trexima, a migraine drug that combines sumatriptan and naproxen sodium. The action date on the response is August 1, 2007.
In an unexpected move, the U.S. Federal Court of Appeals invalidated a patent held by Pfizer (NYSE:PFE) on Norvasc, a treatment for high blood pressure the produced $2.5 billion in revenue last year. The court found in favor of Apotex, but the big winner is Mylan (NASDAQ:MYL), which has already received approval of its generic equivalent of Norvasc. The finding covers all cases brought against Pfizer over the patents. The ruling was surprising because Pfizer has already prevailed in three cases over its Norvasc patents. However, the effect of the ruling is limited by the fact that the drug was scheduled to go off patent in September in any event.
Pharmasset [VRUS] set the terms for its upcoming IPO. The company will seek to place 6 million shares in a range between $12 and $14. Pharmasset is developing oral drugs that treat viral infections, including HIV, hepatitis B and hepatitis C.
Biotech had been up every day so far last week - until Friday. The Centient Biotech 200™ fell 34 points to 3898, a loss of .86%. The S&P 500 was up .11% and Nasdaq was higher by .18%.
Disclosure: Centient management holds a position Genentech shares and does consulting work for Genentech.