"Miracle drug" is not a phrase bandied about lightly in biotechnology, but when key data for Avastin (bevacizumab), the antibody for colorectal cancer from Genentech Inc., were unveiled at the American Society of Clinical Oncology annual meeting in 2003, people were talking.
The FDA cleared the colorectal cancer drug for marketing in February 2004, and Avastin roared at the start. Sales since, though, haven't quite been what some analysts expected. Avastin brought in $555 million for the year, with $200.4 million in the fourth quarter - falling short of consensus estimates of $220 million for the three-month period.
Jennifer Chao, an analyst with Deutsche Bank Securities, wrote in a research note that Avastin's "growth trajectory may be flattening earlier than expected, heightening the importance of garnering additional indications beyond advanced colorectal cancer."
Avastin is in late-stage trials for renal-cell carcinoma, non-small-cell lung cancer (NSCLC), metastatic breast cancer and pancreatic cancer. NSCLC data are expected in the middle of the year. Meanwhile, Ian Clark, Genentech's senior vice president, told investors during a conference call that the company is "incredibly pleased" with Avastin's 55 percent penetration rate as a first-line therapy.
The drug might be hurt further by another compound on the horizon: PTK787 (vatalanib), from Novartis AG and Schering AG, an oral angiogenesis inhibitor in Phase III development for metastatic colorectal cancer.
All of the upcoming drugs targeting vascular endothelial growth factor (VEGF), including Avastin, face a higher standard in oncology treatment, William Li, president and co-founder of the Angiogenesis Foundation, pointed out during a roundtable conference call hosted by Chao last month.
"We're seeing this bar being raised very rapidly," Li said.
The Novartis/Schering compound is a small molecule that penetrates the cell membrane, neutralizing every receptor known to VEGF. Another "very important capability of PTK to think about is that while Avastin blocks only VEGF-A isoforms, PTK also blocks platelet-derived growth factor and C-KIT" - potentially making it even more useful, Li said. C-KIT is a protein on the surfaces of certain cells that binds to stem cell factor.
"PTK is asking, really, the next-generation question, Can you take 19 months as the baseline and add PTK and get more survival?'" Li said. "In theory, one would expect that." The drug "could raise the bar to 25 months," he said.
Li's group is tracking 74 distinct anti-angiogenesis compounds in clinical trials. Of the 74, seven are in Phase III. "We estimate there are more than 200 agents in total," he added, with 100-plus still in preclinical study.
PTK787 is the most promising of those 74, Li said, followed by SU11248, the oral tyrosine kinase inhibitor developed by Sugen Inc., a unit of Pharmacia Corp. (now part of Pfizer Inc.), and the matrix metalloproteinase inhibitor BAY12-9566 from Bayer AG.
Soham Pandya, an analyst with Susquehanna Financial Group, told BioWorld Financial Watch that the release of data related to PTK787 is "certainly going to have a big impact on some biotech stocks."
The first Phase III results are expected in the second quarter of this year from the CONFIRM1 trial. Enrollment was completed last year for CONFIRM1 and CONFIRM2, and Novartis plans to start an adjuvant colon cancer trial in 2005 if the data are positive from CONFIRM1.
"It's a highly anticipated event," Pandya said.
A broad Phase I/II program also is under way to find more indications, including prostate, non-small-cell lung, breast, pancreatic and ovarian cancers, as well as glioblastoma and hematological malignancies.
PTK787's Phase III data are one set that could affect capital flow into - and out of - biotech, Pandya said, noting that institutional investors in the fourth quarter continued to pump money into the sector.
Institutions managing at least $100 million, exclusive of mutual funds, increased their positions in biotech by $12.1 billion while other institutions reduced their holdings by $9.9 billion during the same period, for a net inflow of about $2.2 billion, amounting to a capital inflow of 1.12 percent for the fourth quarter.
For at least one firm, institutional investors are continuing to come through in 2005. Last week, FibroGen Inc. placed about $100 million in convertible preferred stock. "A major objective was to get out there and talk to the U.S. institutional investors," said Laura Hansen, FibroGen's director of corporate communications.
Overall, though, the relatively flat investment into biotechnology equities was due to uncertainty in new drug approvals and upcoming clinical trials, Pandya said. The next scheduled date for an FDA decision on a pending biotech compound is March 20, when word is due on Amylin Pharmaceuticals Inc.'s Symlin (pramlintide acetate), a synthetic version of the human hormone amylin for Type I diabetics and insulin-using patients with Type II diabetes.
By March 29, the agency is due to decide on Millennium Pharmaceuticals Inc.'s already-approved proteasome inhibitor Velcade (bortezomib) for use in second-line multiple myeloma. April 25 is the deadline for the FDA's ruling on Entereg (alvimopan) for postoperative ileus from Adolor Corp. and GlaxoSmithKline plc.
About 16 biotech products are lined up for potential marketing clearance this year, which is about the same number as in recent years. But the situation is different, Pandya said.
"The number is in the ballpark, but most of the drugs are in the small, incremental sales area," he said. "The focus is going to be on companies that can make money in niche products, the smaller-cap names," selling products that bring in $300 million to $400 million per year - still enough to draw investment and deals, Pandya said.
"It's hard to grow their revenue line when [big pharma's sales] numbers are in the billion-dollar range, but you'll continue to see them doing partnerships, that's for sure," he said.