XOMA Ltd.’s stock took a painful hit Friday when the company and its partner, Genentech Inc., released poor preliminary data from a pharmacokinetic study of Xanelim, a psoriasis drug.
XOMA’s stock (NASDAQ:XOMA) Friday closed at $4.42, down $3.21, or 42.1 percent.
Meanwhile, Genentech’s stock (NYSE:DNA) withstood the news better, closing at $44.70, down $4.29, or 8.8 percent. Even though the market for Xanelim appears fairly healthy (about $500 million to $750 million in the U.S.), once XOMA gets its cut, Xanelim (efalizumab) sales likely would not have a major impact on Genentech’s bottom line. And another point is that Cambridge, Mass.-based Biogen Inc. is working on a drug that is expected to compete with Xanelim.
At peak, Dennis Harp, a biotechnology analyst with Deutsche Bank Securities in New York, said Xanelim’s U.S. sales would reach $350 million.
“In my view, the market has overreacted to the news today. We believe Xanelim is a product and it is a matter of when it reaches the market, not whether it reaches the market,” Harp told BioWorld Today. “In our view, if the setback is as much as nine months, it will have a minimal financial impact on Genentech, in part because it is partnered, so the profitability of this product is not as high for Genentech.”
XOMA and Genentech on Friday said an FDA-requested pharmacokinetic study comparing XOMA-produced material and Genentech-produced material did not achieve the predefined statistical definition for comparability.
“This means there is a potential for delay in filing the biologics license application,” Peter Davis, chief financial officer of Berkeley, Calif.-based XOMA, told BioWorld Today. “We have only analyzed the data on a top-line basis, so we have to complete the analysis and try to understand what happened. Then we will meet with the FDA and agree on a program going forward. It is speculation to say what that program would be at this time.”
Davis would not say when the companies are expecting a meeting with the FDA.
A statement released by both companies said, “The study suggested that the Genentech material achieved a slightly higher serum concentration than the XOMA material.”
Colleen Sweeney, manager, corporate communications for South San Francisco-based Genentech, told BioWorld Today that the negative news could delay the BLA filing by several months, most likely beyond this summer.
The FDA deemed the 99-patient pharmacokinetic study necessary on information that the companies made minor manufacturing modifications in the transition from small-scale production (clinical trials) to large scale. (See BioWorld Today, Oct. 8, 2001.)
When notified of the need for the extra study last fall, Genentech and XOMA estimated the delay would set them back about six months.
Xanelim, for moderate to severe psoriasis, is administered subcutaneously once weekly for three months. In two pivotal Phase III trials, Xanelim met its primary endpoint of achieving a 75 percent or greater improvement in Psoriasis Area and Severity Index scores over placebo. (See BioWorld Today, May 25, 2001.)
Davis said the companies have other ongoing trials, including a 500-patient efficacy study in the enrollment process.
It’s not clear whether the FDA will require another trial on Friday’s news, Harp said. “Genentech has three trials currently ongoing one is a placebo-controlled trial, so it is possible that the data from these would be sufficient to meet regulatory requirements, in which case the setback would be six months.”
Meanwhile, Biogen is scheduled on May 23 to present its psoriasis drug, Amevive, to the FDA’s Dermatologic and Ophthalmic Drugs Advisory Committee.
But, Harp said, there’s plenty of room for both Amevive (alefacept) and Xanelim.
“There is considerable heterogeneity among the patient responses and one product will work better in some patients, so there’s room for several products,” he said.
Nevertheless, Davis said XOMA would closely watch the Biogen meeting.
“Obviously, we are interested in how that comes out,” he said. “In addition to looking at them as a competitor, we’ll learn whatever we learn to help make our application better. So we’ll watch with interest.”
Xanelim, a humanized monoclonal antibody, is designed to inhibit the binding of T cells to other cell types and to target three psoriasis processes. According to the National Psoriasis Foundation in Portland, Ore., about 7 million people in the U.S. are affected by psoriasis, a non-contagious, chronic skin disease. The most common form is plaque psoriasis, which is characterized by inflamed patches of the skin topped with silvery white scales.