West Coast Editor
SAN FRANCISCO - As day three of the decidedly upbeat JPMorgan Healthcare Conference began, Bay Area fog burned off and the sun shone bright, but forecasters warned of an approaching cold wave.
The weather metaphor works, at least partly, when applied to the biotech industry itself. Therapeutic battle lines and likely winners steadily are becoming more clear, though opinion is divided on how chilly the year ahead might get.
"Despite a 2006 uptick in [earnings per share] growth across the U.S. large cap biotech group and steady earnings growth in the preceding years, consensus numbers imply an earnings decline going forward," wrote JPMorgan analyst Geoffrey Meacham in his research look-ahead note, published just as the conference began.
But one company that presented Wednesday at the meeting offered a rather sanguine promise for 2006 and beyond. Pharmion Corp. predicted revenues for the past year of about $239 million (up from the previous estimate of about $221 million), slightly beating Thomson Financial estimates of $237.9 million.
"If we evolved in 2006, we have the chance for real transformation in 2007," Pharmion's President and CEO Patrick Mahaffy told conference attendees. He described the Boulder, Colo.-based firm as the "only commercial pure-play oncology story on Wall Street."
With six compounds in the pipeline, Pharmion, "may be launching a drug every year beginning in 2008 through at least 2012," he said.
Third-quarter sales of the company s subcutaneously administered Vidaza (azacytabine) for myelodysplastic syndromes reached $36 million, well above consensus estimate of $32 million, digging in its heels against the likes of Dacogen (decitabine) from Dublin, Calif.-based SuperGen Inc., and Revlimid (lenalidomide) from Celgene Corp., of Summit, N.J. MGI Pharma Inc. owns rights to Dacogen in the U.S., Canada and Mexico.
Pharmion also sells thalidomide for multiple myeloma and leprosy (licensed from Celgene and Penn T Ltd. for all countries outside of North America, Japan, and mainland China). It markets Innohep (tinzaparin), a low-molecular-weight heparin approved in the U.S. for deep-vein thrombosis, as well as Refludan (lepirudin), an antithrombin agent approved in the U.S., Europe and other countries for heparin-induced thrombocytopenia.
Matthew Osborne, analyst with Lazard Capital Markets in New York, conceded in a report this week that Pharmion's management "is making appropriate strategic decisions in developing its product portfolio, which will provide the company top-line and bottom-line growth in years 2009 and beyond."
Among the likely milestones due this year is FDA approval of an intravenous formulation of Vidaza, for which the original PDUFA came and went this fall.
"It clearly was not a priority of theirs," Mahaffy said, but action is expected "in the January/February time frame."
Oral Vidaza will enter the clinic in the first quarter, too. "It's really a matter of getting the FDA's go-ahead, which we expect in the next 30 days or so," he said. And Phase II studies will begin with Vidaza and MGCD0103 (an oral isotype-selective histone deacetylase inhibitor partnered with MethylGene Inc., of Montreal) against hematologic malignancies. In December, Pharmion and MethylGene started a Phase II with MGCD0103 in patients with high-risk MDS or relapsed or refractory acute myelogenous leukemia.
By the middle of the year, Pharmion probably will submit satraplatin, the oral, platinum-based chemotherapy, for approval in Europe against hormone-refractory prostate cancer. The company signed a potential $270 million deal in late 2005 with GPC Biotech AG, of Martinsried, Germany, for overseas rights. (See BioWorld Today, Dec. 21, 2005.)
Final data will be available in the third quarter from an international survival study with Vidaza in MDS, and in the second half of the year will come results from a Phase II study with ambrucin against relapsed/refractory small-cell lung cancer.
Pharmion acquired the anthracycline amrubicin in the $55 million net-of-cash buyout of privately held Cabrellis Pharmaceuticals Inc., of San Diego, in a deal that cost $59 million up front, with $12.5 million due each for approvals of amrubicin in the U.S. and the European Union. If the drug is cleared for a second indication in the U.S. or overseas, Pharmion would make another payment of $10 million for each market. (See BioWorld Today, Nov. 17, 2006.)
Much interest, though, focuses on MDS. Last year brought "a great amount of concern," legitimate, about the changing competitive landscape in the MDS field and how Pharmion would respond to that, Mahaffy acknowledged.
Medical experts gathered by San Francisco-based ThinkEquity Partners took up the matter in November. They "uniformly believed" that, because of toxicity, the use of Revlimid will be limited to the subpopulation of patients with chromosome 5q deletion, wrote analyst Vinny Jindal, and experts viewed the hypomethylating agents, including Vidaza and Dacogen, as "largely similar."
But the market will widen, Jindal predicted, as use of the agents grows "beyond early adopters and into the average' hematologist's office." Though comparisons can't be made until later this year, Jindal said he "continues to expect that the multicenter trial of Dacogen's five-day schedule will produce response rates in excess of the mid-teen rates produced by Vidaza."
The JPMorgan conference ended today.