Washington Editor

The FDA approved Tercica Inc.'s Increlex, a long-term treatment for growth failure in children with severe primary insulin-like growth factor-1 deficiency (IGFD), in a decision that has dealt a blow to a would-be competitor.

"IGF-1 deficiency is really now recognized as a disease, and one with a very specific treatment," Tercica President and CEO John Scarlett told BioWorld Today. "What has been needed has been replacement of that missing IGF-1, and today we now have a drug that can do that."

Increlex (rhIGF-1, mecasermin [rDNA origin] injection), approved within a six-month priority review time frame, is the only therapy indicated to treat children with severe primary IGFD. Scarlett called it "the first really major innovation in treating short stature since recombinant growth hormone was approved 20 years ago."

Afflicting about 6,000 U.S. children, primary IGFD is a growth hormone-resistant state characterized by abnormally low blood IGF-1 levels in the presence of normal or elevated endogenous growth hormone. IGF-1 is the direct mediator of growth hormone's effect on statural growth and must be present in order for children's bones, cartilage and organs to grow normally, so without adequate levels of it, children cannot achieve height within the normal range.

"By being specifically targeted and having an FDA indication, it really codifies the disease," Scarlett said. "We now have both a treatment and also a name and well-recognized definition of that disease."

The approval buoyed the Brisbane, Calif.-based company's shares by 21.2 percent, as Wednesday, the stock (NASDAQ:TRCA) gained $1.98 to close at $11.31.

"This marks the transition of Tercica from a research and development operation to a commercial entity," Scarlett said, adding that at January's planned launch, "we'll have 30 sales reps and associated managers in the field talking to the 400 pediatric endocrinologists who form the basis of this short stature market and are the prescribers."

Tercica acquired exclusive rights to develop, commercialize and manufacture the protein from South San Francisco-based Genentech Inc., which is due a milestone payment as a result of the approval and eventual royalties that Scarlett characterized as equal to about 20 percent to 25 percent of the cost of goods sold. He also noted the $20,000-per-patient annual growth hormone pricing as a benchmark for Increlex's cost.

All commercialization efforts are on Tercica's shoulders.

Increlex's active ingredient is identical to the natural IGF-1 hormone, and the FDA has named it an orphan drug for severe primary IGFD. Its approval represents a serious setback to Insmed Inc., which has developed a similar product called SomatoKine. Made of recombinant human IGF-I and IGF-binding protein-3, it also has orphan drug status, though Increlex's win at the finish line will give it seven years of market exclusivity and effectively shut out SomatoKine.

In a recent effort to throw a wrench into Increlex's approval, Insmed filed a citizen petition asking that the FDA immediately deny the application. That could have caused the agency to push back its decision on Increlex, maybe even beyond its Oct. 3 PDUFA date for SomatoKine, but that tactic did not work. On Wednesday, Insmed's shares (NASDAQ:INSM) tanked by 36.3 percent, dropping 53 cents to 93 cents. (See BioWorld Today, Aug. 19, 2005.)

"The citizen petition was denied as we were approved," Scarlett said, "so it's a pretty straightforward story from that perspective."

Officials at Insmed, of Richmond, Va., could not be reached for comment.

The Increlex approval was based on data from 71 Increlex patients in whom there was a statistically significant increase (p<0.001) in growth rate over an eight-year period. Compared to pre-treatment growth patterns, on average, children gained an additional inch per year for each year of therapy over the full eight years. A safety analysis showed that long-term treatment with the product appears to be well tolerated, with its most common adverse events being hypoglycemia, lipohypertrophy and tonsillar hypertrophy. Side effects were generally mild to moderate in nature, and no patients withdrew from the study as a result of them. Its new drug application was filed in the spring. (See BioWorld Today, March 1, 2005.)

Increlex is delivered via twice-daily subcutaneous injections, around morning and evening meals. Treatment lasts through puberty, so those with early diagnoses will use the product for longer durations.

Tercica, which has not partnered Increlex's overseas rights either, has yet to file for approval anywhere other than the domestic territory. But Scarlett noted that European markets "are very similar in size and nature" to the U.S., and added that the company likely would address any plans to tap such markets later in the year.

Also going forward, Tercica continues to evaluate Increlex's use in a less-severe form of IGF-1 deficiency that affects more than 20,000 U.S. children. Other undisclosed efforts under investigation at the company are focused on additional disease states mediated by IGF-1 deficiency, as well as other endocrine diseases.

"We see ourselves as an endocrinology company," Scarlett said. "We think it's a good place to be, as a lot of the very large pharmaceutical companies and major biotech companies really do not have a business model that makes it very attractive for them to look at these smaller niche markets. But a small company like Tercica can be very successful there."

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