As holiday gatherings ended, the year's end neared and the influenza virus began making inroads - recalling what had to be biotechnology's main embarrassment of 2004, Chiron Corp.'s vaccine-shortage snafu - industry observers began taking stock of the past 12 months.

All in all, pretty good.

President George Bush's re-election might not have delighted everyone, but other developments on the governmental front proved encouraging, such as the November passage in California of Proposition 71, which opened the door to $3 billion in state funding for stem-cell research.

On the regulatory front, approval of 20 biotech products cheered the industry. Of special note was the FDA nod in December for Eyetech Pharmaceuticals Inc.'s Macugen (pegaptanib sodium), the long-awaited, injected therapy for neovascular (wet) age-related macular degeneration. Eyetech rounded out the year with glory similar to that gained at the start of 2004, when the company raised $157 million in an initial public offering, selling 7.5 million shares at $21 each - even above the proposed range of $18 to $20.

Not to be overlooked is Tarceva (erlotinib). The drug from Genentech Inc. and OSI Pharmaceuticals Inc. won clearance by the FDA, with a notation by the agency that benefit in lung cancer patients proved much greater in those with high levels of epidermal growth factor receptor (EGFR), which was scientifically known but actually in the label, investors worried, might trim prescriptions. (Genentech had scored in late February, too, when its Avastin [bevacizumab] for colorectal cancer received the FDA's blessing.)

Those Tarceva concerns fell into shadow, at least temporarily, as AstraZeneca plc's EGFR drug for non-small-cell lung cancer, Iressa (gefitinib), fizzled in follow-up trials in that indication, providing a boost to OSI's shares and, somewhat, to Genentech's. Speculators had believed the two drugs would turn out more or less the same, but the AstraZeneca compound - approved in 2003 on the basis of tumor response rate, with more studies to come - faltered in the follow-up trial. Tarceva had been approved with a demonstrated 42.5 percent survival advantage over placebo.

Erbitux (cetuximab), from ImClone Systems Inc. and Bristol-Meyers Squibb Co., finally hit the market in 2004, after a development course fraught with difficulty and scandal. The FDA approved Erbitux in combination with irinotecan for treating EGFR-expressing, metastatic colorectal carcinoma in patients who are refractory to irinotecan-based chemotherapy. The FDA also approved it for administration as a single agent in treating EGFR-expressing, metastatic colorectal carcinoma in those patients who are intolerant.

Amgen Inc. gained FDA approval of Sensipar (cinacalcet) in March for secondary hyperparathyroidism in patients with chronic kidney disease on dialysis and for hypercalcemia in those with parathyroid carcinoma, an event that triggered a $10 million milestone to NPS Pharmaceuticals Inc. In December, Amgen rang the bell again, this time with clearance for Kepivance (palifermin), its fast-track keratinocyte growth factor for mucositis in chemotherapy patients with blood cancers who get bone marrow transplants.

Adding to the spate of happy, late-year news was Tysabri (natalizumab), the alpha-4 antagonist for multiple sclerosis, formerly known as Antegren from Biogen Idec Inc. and partner Elan Corp. plc. Tysabri is to be used as a monotherapy and in combination against relapsing forms of MS.

And just last week, Genzyme Corp.'s clofarabine - the first new leukemia treatment for children in more than a decade - won FDA approval. Brand-named Clolar, it targets pediatric refractory or relapsed acute lymphoblastic leukemia, and Genzyme expected to price and begin selling the next-generation purine nucleoside analogue in January.

MS, along with other metabolic disorders, became the center of one of 2004's fatter deals. In the fall, Wyeth entered a potential $372 million pact with Plexxikon Inc., an agreement that involved payment of more than $22 million, including an up-front license fee and multiyear research funding, plus milestones that could total almost $350 million as drugs are developed and commercialized, and royalties. Wyeth also pledged a loan to fund Plexxikon's share of clinical efforts.

Plexxikon's area of expertise covers peroxisome proliferator-activated receptors (PPARs), upon which the FDA had turned its gaze during the summer, issuing an edict calling for all PPAR trials expected to last more than six months to gather and submit two years' worth of rodent toxicity data first. (See BioWorld Financial Watch, July 19, 2004.)

Since Plexxikon's work still was early stage, it wasn't hit by the rule - one of the factors that made the firm so alluring to Wyeth, which at least in this instance was pleased to accept research at the preclinical stage.

Another major collaboration, featuring laboratory work much further along, paired Medarex Inc. with BMS on a Phase III metastatic-melanoma drug. The deal, which could mean up to $530 million for Medarex, is centered on developing and commercializing MDX-010, a fully human antibody targeting the CTLA-4 receptor. The T-cell molecule, believed to be responsible for suppressing immune response, also has been investigated by BMS as an immunosuppressive product not included in the Medarex deal.

In mergers and acquisitions, Biogen Inc.'s takeover of Idec Pharmaceuticals Inc., disclosed in the summer of 2003, was a hard act to follow. The move that formed Biogen Idec resulted in a firm with a market cap of $13.7 billion, making it the third-largest biotechnology firm based on revenue, profits and research and development spending.

But a couple of billion-dollar deals took place, the largest one overseas. In May, Celltech Group plc, the UK's largest biotech firm, agreed to a takeover by UCB SA, of Brussels, Belgium, in an all-cash deal that valued Celltech at about £1.5 billion (then US$2.7 billion). Stateside, there was Amgen's gobbling of Tularik Inc. for $1.3 billion.

Genzyme Corp. scooped up a pair of companies in separate transactions. The firm took ILEX Oncology Inc. for $1 billion and the Physician Services unit of bankruptcy-bound Impath Inc. for $215 million.

But the bottom line is, as always, the bottom line - and biotechnology as of late December had raised about $20.5 billion, as compared to $16.3 billion in about the same period the previous year. Will it be a happy new year? Well, let's just say it's been a "reasonably satisfying" 2004, and let it go at that. n