Washington Editor

In another step toward completing the merger of Immunex Corp. and Amgen Inc., the former on Friday said it has found a buyer for its cancer drug, Leukine.

Berlin-based Schering AG signed a definitive agreement to purchase worldwide rights to the cancer drug for present and future indications for about $380 million in cash.

The sale of Leukine has been expected since December, when Amgen, of Thousand Oaks, Calif., said it would acquire Immunex, of Seattle, for about $16 billion in stock and cash. (See BioWorld Today, Dec. 18, 2001.)

The Schering deal calls for the German pharmaceutical company to pay additional fees upon achievement of certain milestones related to a Phase II trial of Leukine in Crohn’s disease. In 2001, U.S. sales of Leukine were $108 million (the product is marketed only in the U.S.). The drug sale is contingent upon Federal Trade Commission approval of the Immunex-Amgen merger, expected in June.

While Leukine (sargramostim) and Amgen’s blockbuster, Neupogen, are slightly different, both products are used to fight infection and boost white blood cells in chemotherapy patients.

“[The products] have slightly different labels, but in terms of demand, the demand for Neupogen far exceeds the demand for Leukine at this point. And now with the recent introduction of Neulasta [the next generation of Neupogen], the competition for Leukine is really heating up,” Mark Schoenebaum, biotech analyst with CIBC World Market Corp. in New York, told BioWorld Today. “I think that is reflected in the somewhat modest price paid for the drug. At three and a half times the sales of 2001, in biotech terms, Schering AG got a pretty good deal.”

Amgen reported $1.3 billion in Neupogen sales last year, a 10 percent increase over sales in 2000. (See BioWorld Today, Jan. 25, 2002.)

Regarding the Amgen-Immunex merger, Kris Greco, Immunex’s manager, corporate communications, told BioWorld Today that Leukine is the only product slated for divesture.

Schoenebaum said it is assumed that the FTC would refuse to approve the Amgen-Immunex merger unless one of the white blood cell products were divested, for the purpose of preventing a possible monopoly.

So why not just stop production of Leukine, a competing product to Neupogen? Schoenebaum said a move like that could be considered unethical.

“There are some physicians who prefer Leukine in some patients and it would be almost unethical to withdraw a therapy from the market. I think the company would come under tremendous pressure from the medical community not to do that, and economically, they get almost $400 million right now, as opposed to getting nothing if they stop production,” Schoenebaum said.

Greco said all future decisions related to the Crohn’s studies and other possible areas will be made by Schering. Leukine also has been studied in other indications such as mucositis.

The general worldwide market for Crohn’s disease is about $1 billion annually, Schoenebaum said. “But it’s too early to tell how much of that market Leukine would occupy,” he said.

Schering views the Leukine purchase as a complement to its oncology program that will help expand its biotechnology development portfolio and increase its U.S. presence, a prepared statement from Hubertus Erlen, chairman, executive board for Schering, said. “We look forward to continuing investment in the marketing, research and manufacturing activities associated with Leukine. Importantly, we see opportunities to build the brand as the markets in its current indications grow, and as we pursue other possible new indications for Leukine such as Crohn’s disease.”

Also in a prepared statement, Peggy Phillips, Immunex’s executive vice president and chief operating officer, said Schering has expressed an interest in hiring some Immunex employees who are relevant to the future clinical development, production, testing, marketing and sales of Leukine.

Immunex’s stock (NASDAQ:IMNX) closed Friday at $25.51, down 50 cents. Amgen’s shares (NASDAQ:AMGN) closed at $48.80, down $1.52.