Miles Inc. announced late Thursday that FDA has given itspharmaceutical division marketing clearance for itsrecombinant Factor VIII product Kogenate (anti-hemophilicfactor recombinant) to treat hemophilia A, a chronic bleedingdisorder.

Genentech Inc. (NYSE:GNE) of South San Francisco, Calif.,originally cloned the Factor VIII gene and licensed it to Milesin 1984 as part of a collaborative agreement.

"Miles acquired the rights to use the gene and develop amanufacturing process to produce Factor VIII," explained DonHyman, Miles' director of corporate communications. Moreover,"Miles conducted all the trials and will market the product."

According to the terms of the agreement, Genentech is due toreceive a "significant milestone payment at the time ofapproval, as well as royalties on sales," said Jim Weiss,Genentech's manager of corporate communications.

This is the second genetically engineered Factor VIII product towin FDA approval. The first, Recombinate, was developed byBaxter Healthcare Corp.'s Hyland Division and Genetics InstituteInc. of Cambridge, Mass., in a long-standing collaboration. FDAapproved Recombinate last Dec. 10.

Coming directly on the heels of a down day for Amgen Inc. anda bitter week for Synergen Inc., Thursday's approval of FactorVIII is good news for biotechnology, but probably not greatnews, according to analysts.

"Factor VIII's already been approved," said Peter Drake ofVector Securities International Inc. "The good news is it's abiotechnology product that got approved." Jim McCamant,editor of Medical Technology Stock Letter agrees. "It will beuseful for industry to remember that sometimes we have agood product." However, McCamant added that he thinks theapproval "won't have a big impact in this market."

Neither does David Stone, an analyst with Cowen & Co. "I don'tthink it will make a big difference in the sense that onerecombinant Factor VIII has already been approved. But it is ahelpful reminder that useful products are coming out of thistechnology."

The market barely reacted when the first Factor VIII wasapproved -- and that was before the turn of the year and theturn of events in biotech. Genetics Institute's stock(NASDAQ:GENIZ) actually lost 75 cents the day that approvalwas announced, and regained a mere 25 cents by the end ofthe next trading day, closing at $31.50.

Genentech closed Thursday at $32.50, down $1.25 a share.

Miles expects to have Kogenate on the market by next week,Hyman told BioWorld. "As of now, we haven't finalized thepricing for Kogenate, but it will be competitive with Baxter'srecombinant product," he added.

This makes the second approved product for treatinghemophilia A in Miles' portfolio. The first is a plasma-derivedFactor VIII. "Having both a recombinant Factor VIII and aplasma-sourced Factor VIII will increase the world's combinedsupply of clotting factor and enhance therapy availability andaccess for all hemophilia patients," said Ralph Galustian,president of the Miles biological products business unit. "It willalso allow our industry to meet the growing demand forprophylactic use of clotting factor."

Stone expects that the recombinant products will eventuallyreplace the blood-derived products. "The speed at which thatoccurs depends on the pricing practices of various Factor VIIIsuppliers," Stone said.

Miles plans to eventually come up with a gene therapyapproach to treating hemophilia A. The West Haven, Conn.,company signed a collaborative agreement with Viagene Inc. inJanuary to determine the feasibility of using a retrovirus as acarrier vehicle to deliver a Factor VIII gene to cells in patientswho lack the gene.

-- Jennifer Van Brunt Senior Editor

(c) 1997 American Health Consultants. All rights reserved.