National Editor

Investors might have seen hints of trouble much earlier, but the disclosure by Immunomedics Inc. Tuesday morning that the company was in "advanced discussions" with Amgen Inc. potentially to end their deal for epratuzumab sent the former's stock crashing.

That news was followed by Amgen's official release in the afternoon stating it "plans to seek another party for the development and commercialization of [epratuzumab]," effectively dropping the drug.

Immunomedics' stock (NASDAQ:IMMU) plummeted $3.87, Tuesday, or 53.4 percent, to close at $3.38.

"I wouldn't say we saw it coming, but at the end of 2002 the signals were fairly strong that this wasn't on the A' list [for Amgen]," said Christopher Raymond, analyst with Robert W. Baird & Co. in Chicago. Around that time, epratuzumab yielded "fairly lackluster" data from a trial with the drug as a single agent for non-Hodgkin's lymphoma, he said.

Amgen licensed epratuzumab about three years ago in a deal that provided Immunomedics, of Morris Plains, N.J., with $18 million up front and the potential for as much as $290 million more. (See BioWorld Today, Dec. 19, 2000.)

The NHL treatment landscape has changed since those days, with new drugs available such as Rituxan (rituximab) from South San Francisco-based Genentech Inc. and IDEC Pharmaceuticals Inc., of San Diego; and Zevalin (ibritumomab tiuxetan), developed by IDEC.

In January, Amgen and Immunomedics said they were stopping a Phase III monotherapy trial with epratuzumab in patients with low-grade, follicular B-cell NHL who had failed other therapies, including those using Rituxan.

At the time, the firms said they planned to try epratuzumab - which binds to the CD22 cell-surface protein rather than the CD20 protein, to which Rituxan binds - as a combination therapy with Rituxan in patients with indolent NHL.

That plan is finished, at least as far as Amgen is concerned.

Raymond blamed the lack of efficacy as a monotherapy for Amgen's decision to reassess the epratuzumab deal.

"If it doesn't have activity as a single agent that's clear cut, it doesn't meet [Amgen's] portfolio review, probably," he said, giving Amgen credit for making moves once the single-agent results became clear.

"A lot of organizations won't and leave their partners dangling," he said. Raymond's models included no contribution from epratuzumab to Amgen's top line, he noted. Matthew Geller, analyst with CIBC World Markets in New York, said the same.

But the drug was important to Immunomedics (which neither Geller nor Raymond covers), and still is.

"One dynamic that Immunomedics may have going for them is that there's an awful lot of demand for cancer products, a lot of people shopping," Raymond told BioWorld Today.

New York-based Pfizer Inc., for example, has "telegraphed fairly strongly" that it's in the market for cancer drugs. Although Pfizer might not be the exact fit for Immunomedics, others are likely paying attention to what happens with epratuzumab, Raymond noted.

Amgen's stock (NASDAQ:AMGN) closed Tuesday at $58.98, down 16 cents.

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