West Coast Editor
Feeling the continued squeeze of competing drugs for its photodynamic therapy Visudyne in age-related macular degeneration - especially Genentech Inc.'s Lucentis - QLT Inc. is cutting staff by 115, selling real estate and seeking offers for all or parts of QLT USA, formerly Atrix Pharmaceuticals Inc., acquired in 2004.
The news came the day before Visudyne (verteporfin) partner Novartis AG, of Basel, Switzerland, provided word that global sales fell about 40 percent in the fourth quarter to $45.5 million, and dropped almost the same percentage for the full year, to $214.9 million. Visudyne's sales numbers, while not stellar, were not as low as some had expected.
"Much of that was anticipated - Lucentis is a good drug," Douglas Chow, analyst with Caris & Co. in Boston, told BioWorld Today. QLT, he added, "is not in all that much trouble, per se."
As of Sept. 30, the Vancouver, British Columbia-based firm had $172.2 million in cash, cash equivalents and $122 million in restricted cash, with $172.5 million of debt, as convertible notes due this fall. QLT has enough to pay off the debt, breaking even. As for net cash, the company hardly has any, tallying cash, cash equivalents and short-term investments of about $294,000 at the end of last year's third quarter.
"They're selling the Vancouver real estate," Chow noted, including the headquarters building and associated land. "That should be a fair amount, in the millions of dollars." Company officials could not be reached, but in a press release promised updated financial details next month.
QLT's shares (NASDAQ:QLTI) closed Thursday at $4.26, down 9 cents.
In the U.S., Visudyne sales for the quarter reached $10 million, or 22 percent of the total, with average daily use rising to 127 vials from 118, translating to an increase of $0.6 million, quarter over quarter.
The Visudyne franchise in the busy wet AMD space has taken on water, especially since the approval of Genentech's Lucentis (ranibizumab) in the summer of 2006, and there's no shortage of other players on the market and in pipelines. Even before Lucentis' approval, QLT disclosed plans to reduce staff by as much as 46 percent, from 567 to 310. SEC paperwork showed about 100 employees were helped with severance in 2005, and another 80 were let go in the fall of last year. (See BioWorld Today, July 5, 2006, and Dec. 9, 2005.)
QLT will use the proceeds of its latest moves - and planned moves - to help pay the convertible debt and to expand Visudyne, by gaining acceptance of its use as a combination therapy.
A Phase II combo trial, called RADICAL (Reduced Fluence Visudyne-Anti-VEGF-Dexamethasone in Combination for AMD Lesions), is under way, comparing Visudyne plus Lucentis to Lucentis alone in patients with choroidal neovascularization secondary to AMD.
The study aims to find out whether combo therapy (reduced-fluence Visudyne followed by Lucentis or either of two regimens of reduced-fluence Visudyne followed by Lucentis-dexamethasone triple therapy) lowers retreatment rates compared with Lucentis monotherapy, while keeping similar vision outcomes and acceptable safety.
Six-month results are expected from RADICAL in the fourth quarter of this year. Meanwhile, QLT will pursue its punctal plug delivery technology in glaucoma, with an investigational new drug application filing expected soon and a Phase I/II trial expected to start in the first half of this year.
Punctal plugs - tiny plugs inserted into tear ducts - already are used for relief of dry eye, blocking tear drainage. QLT acquired the delivery system, in development for sustained release of drugs, in a deal last year, shelling out $42 million plus milestone payments to take over ForSight Newco II Inc. of Menlo Park, Calif., a spin-out of ForSight Labs LLC. (See BioWorld Today, Oct. 10, 2007.)
QLT's 2004 buyout of Fort Collins, Colo.-based Atrix (since renamed QLT USA) in a deal valued at $855 million, brought aboard the marketed products Eligard for prostate cancer - just launched the year before - as well as Aczone for acne vulgaris, and the Atrigel drug delivery system. Interested bidders are sought for any or all of the assets. (See BioWorld Today, June 15, 2004.)
Eligard, a luteinizing hormone-releasing hormone agonist, might prove a challenge to offload, facing risk in the form of a generic form of the competing LHRH agonist Lupron (leuprolide, TAP Pharmaceutical Products Inc. and Abbott). Aczone could be an easier sell, if the FDA goes along with a label change, accepted for filing in July.
With Aczone, QLT wants to remove the requirements for glucose-6-phosphate dehydrogenase (G6PD) screening and blood monitoring in the label, put there as a warning for users predisposed to hemolytic anemia. The request is based on a Phase IV trial in 56 safety-evaluable, G6PD-deficient patients who showed no evidence of the disease.
Also in QLT's pipeline is the photodynamic therapy lemuteporfin (QLT00748), expected to finish human proof-of-concept studies for moderate to severe acne this year.