Editor

In the race between Insmed Inc. and Tercica Inc. to grab market share with their growth hormone deficiency drugs, the only thing certain is uncertainty.

Late last month, Insmed chalked up an approvable letter from the FDA for its product iPlex (mecasermin rinfibate), formerly called SomatoKine, weeks after Tercica's recombinant human insulin-like growth factor-1, known as Increlex, won market clearance for the same indication.

Geoffrey Allan, president and CEO of Insmed, assured investors during a conference call that the agency needed no more trials with iPlex and needed only "minor" clarifications about chemistry, manufacturing and controls to approve the drug, which he expected to launch early next year.

The drug, made of recombinant human insulin-like growth factor-1 and rhIGF binding protein-3 (binding it to the protein keeps the drug in the blood longer), is indicated for the treatment of children with severe primary insulin-like growth factor-1 deficiency (IGFD).

But Tercica already had gained the FDA's go-ahead for Increlex, its long-term treatment of growth failure in children with severe primary IGFD. Twice-daily Increlex, like its similarly designed, would-be competitor iPlex (administered once per day), was designated an orphan drug, which confers seven years of marketing exclusivity in the U.S.

The battle has quite a history. This summer, Insmed's bid to thwart Increlex's approval with a citizen petition fizzled. Earlier, Tercica and licensor Genentech Inc. filed for a preliminary injunction to block Insmed from making and selling its drug. Tercica ultimately withdrew the motion, but a patent infringement lawsuit alleging Insmed infringed on three patents relating to the combination of IGF-1 and IGFBP-3 in the treatment of primary IGF-1 deficiency has yet to be resolved. (See BioWorld Financial Watch, Aug. 22, 2005.)

Who wins? That's hard to say just yet. Insmed followed up its good news about the approvable letter with a press release cautioning that the FDA has not determined yet whether its nod for Tercica's drug will block the final approval of iPlex. Having jumped more than 30 percent on the positive news, Insmed's shares dipped about 12 percent after the warning.

The company followed this news with a brighter note. Data from 25 patients featured at the European Society of Pediatric Endocrinology/Lawson Wilkins Pediatric Endocrine Society's 7th Joint Meeting showed iPlex safely and significantly increased height velocity, the primary endpoint of the study in children with growth failure.

Specifically, of the children dosed with up to 1 mg/kg of iPlex, those who had IGF levels in the target range grew about 8.2 cm in the first year, while the patients who had below normal levels grew 5.6 cm per year. Even the low-dose group showed high statistical significance in height velocity.

A subset of patients who suffered the most severe deficiency was dosed up to 2 mg/kg and grew an average of 8.2 cm per year, according to nine-months of data. That group had grown an average of only 2.2 cm per year prior to receiving treatment.

Obviously, Increlex's data has proven good enough to win approval, too. Questions remain, though less about either drug's efficacy than what the agency might do. A FDA spokeswoman said the agency would not comment on drugs at the approvable stage.

The market seems worth fighting for. It's estimated at $150 million in severe IGFD, and another $450 million in non-severe cases. About 6,000 children in the U.S. suffer from primary IGF deficiency, characterized by abnormally low blood IGF-1 levels in the presence of normal or elevated endogenous growth hormone. Without enough IGF-1, bones, cartilage and organs cannot grow properly.

Since the FDA is not talking, observers were left to speculate on the tea leaves scattered before them.

Interestingly, Insmed in its press release regarding the approvable letter noted that the firm had previously referred to its primary indication - the one in which Tercica's drug was granted orphan status - as growth hormone insensitivity syndrome (GHIS), but "based on FDA input" the firm is now calling the condition severe primary IGFD. The agency seems to want one name for the condition across the board, an issue that could bode ill for Insmed's chances, wrote analyst Jim Reddoch, with Friedman, Billings, Ramsey & Co., in a research report.

"Language [in the press release] makes us think iPlex is incrementally more likely to be ruled 'same product, same indication' and thereby excluded from the market," Reddoch wrote. "Tercica's Increlex, which had orphan status for GHIS, maintains its orphan status," whereas iPlex "was just granted 'approvable' status in the same indication, so it should be subject to the seven-year exclusion if the FDA deems it to be the same drug."

Still, there's room for surprise. The outright approval of Increlex itself was once deemed a long shot by Reddoch, who had given that event a 25 percent chance. Now, although the company pays a small royalty to Genentech, "Tercica owns Increlex outright, making the company a potential acquisition target," he wrote.

Meanwhile, the firm is building a sales force of 30 people to boost the launch of Increlex, which Reddoch, who estimates a cost of $20,000 per year for the therapy, expects to occur on schedule in the second half of next year.

"It will probably take a while for doctors to become comfortable with using Increlex in off-label indications such as non-severe IGFD or growth hormone failures (we have significant non-severe sales starting in 2008)," he wrote, estimating sales of $17 million in 2006, $54 million in 2007, $138 million in 2008, and $219 million for 2009.