You might not expect onlookers to be especially sanguine about competitors against erythropoietin king Amgen Inc., which continues to reap revenues galore from its blood-boosting blockbuster drug. Last week, though, two companies with EPO ambitions made news.
One Transkaryotic Therapies Inc., already in a court battle with Amgen gained European approval to sell its anemia treatment, Dynepo (epoetin delta), for dialysis patients and those who have not yet undergone the procedure. TKT said it would delay launch of the drug, though, pending settlement of the legal issues.
The second company, Gryphon Sciences Inc., hauled in a deal worth up to $155 million with F. Hoffmann-La Roche Ltd., which will develop the former's Synthetic Erythropoiesis Protein (SEP) for chemotherapy and hemodialysis patients. SEP is made through chemical protein synthesis and with polymers to increase the circulating half-life.
In the case of TKT, the court battle has been long and arduous. With partner Aventis Pharma AG, TKT has faced off against Amgen, and its Japanese affiliate, Kirin-Amgen, has appealed decisions in the U.S. and abroad.
Decisions on both sides of the ocean are expected by 2003, and European patents on erythropoietin expire in 2004. Once Dynepo is approved there, analyst Thomas Dietz with Pacific Growth Equities guessed, the drug could take a third of the erythropoietin market $300 million to $350 million.
TKT, which also focuses on niche-market proteins and gene therapy, uses gene activation (rather than nonhuman host cells) to make new versions of existing protein drugs such as erythropoietin. Gene activation turns on a gene inside a human cell to make the desired protein, and bioreactors similar to those used in host-cell methods harvest the engineered human cells.
In the case of Gryphon, chemical synthesis plus polymers let the company get around Amgen's patent guardianship of Epogen (epoetin alfa), said Friedhelm Blobel, president and CEO, and the technology may allow for similar drugs later, he added. "The list of exciting interferons, interleukins and growth factors is pretty well known," Blobel put it.
But the subject for now is erythropoietin as made in the laboratory. Often called EPO, it is in its natural state a hormone chemically, a glycoprotein produced by the kidney that promotes the formation of red blood cells by bone marrow. Kidney cells in charge of making EPO get their signal from low oxygen in the blood. EPO boosts blood cells and starts the synthesis of hemoglobin, which transports oxygen.
"Even with TKT rolling out their product, it's going to be a tough market for them," said Janet Gearlds, analyst and portfolio manager for Wells Fargo Private Asset Management in San Francisco.
Amgen, overall, is hardly hurting, in the EPO space or elsewhere. The biotechnology giant's $16 billion merger with Immunex Corp., of Seattle, is expected to close either on time or a bit ahead of schedule, around the second half of this year, maybe as early as May or June.
A condition of the deal is divestiture of the white blood cell booster Leukine (sargramostim), a yeast-produced granulocyte macrophage colony-stimulating factor for patients with myelogenous leukemia and for supporting peripheral blood progenitor cell mobilization.
Insiders say interest in Leukine is high, but no deal has been disclosed. Novantrone, an Immunex chemotherapeutic agent approved for secondary progressive multiple sclerosis, might also go, but it needn't for the merger to proceed.
In February, Amgen won a speedy approval for Neulasta (pegfilgrastim), its second generation of Neupogen (filgrastim), a white blood cell booster. Amgen's second generation of Epogen, called Aranesp (darbepoetin alpha), achieved, with Epogen, $2.2 billion in sales last year, up 10 percent. In the fourth quarter, Amgen launched Kineret, a rheumatoid arthritis drug, which reaped $12 million in sales as it finished out the year.
Analysts look for Kineret sales to be as high as $110 million this year, with the potential of several times that, especially in patients for whom Immunex's RA drugs Enbrel (etanercept) or Centocor Inc.'s Remicade (infliximab) don't work as well as Kineret may. The label excludes using Kineret with either of them.
Although there have been some rumblings about a brief Enbrel shortage due to a low batch yield, Immunex's Rhode Island manufacturing facility is on schedule and expected to be approved by the FDA late this year or early next.
As it marches toward more manufacturing capacity, Immunex has its own plans for Enbrel and is slated to meet with the FDA shortly about designing a Phase III trial to evaluate the drug in psoriasis. Likely to be large, the trial could mean approval of Enbrel in that indication wouldn't come until late 2004.
One dampening factor could be the prospect of approval for Abbott Park, Ill.-based Abbott Laboratories' antitumor necrosis factor monoclonal antibody, D2E7, which proved strong in a Phase II study with 271 patients, results from which were disclosed at the American College of Rheumatology meeting in San Francisco in November. Enbrel is an anti-TNF drug, too, but D2E7 may be dosed less often.
"There's definitely a threat," Gearlds told Financial Watch, even though the Abbott drug wouldn't reach the market until 2004 or 2005. "It's going to be kind of an Achilles' heel for Amgen, but [in RA] there's room for more players."
There's more good news for Amgen/Immunex. Also in February, the United States Pharmacopeia accepted Aranesp for the treatment of chemotherapy-associated anemia and anemia associated with chronic renal failure. The acceptance came several months ahead of the expected time frame, and means half the cancer patients covered by Medicaid or private insurance will be reimbursed. The acceptance arrived "a full quarter ahead of what people were predicting," Gearlds said.
Amgen is still waiting for the FDA's nod regarding a biologics license application supplement, submitted last year, for Aranesp for the treatment of cancer patients suffering from anemia associated with certain types of chemotherapy. The market for Aranesp in predialysis seems ripe, too. Aranesp allows for fewer injections, and thus may appeal to the many anemic predialysis patients that now go untreated.
"There are about 1 million [such patients], and about a third would benefit from this kind of treatment," Gearlds said. "Only about 100,000 of those are currently being treated," which means a sales potential of about $1 billion, she added.
Another bright spot possibly ahead: The Center for Medicare and Medicaid said it may expand reimbursement to include injectables, with a decision expected in the next few weeks.
"That could be huge for Amgen," Gearlds said.
Down the road, she said, the key area for Amgen will be in oncology, with Aranesp. Cancer patients "haven't been fully reached, and with the potential for the once-every-chemo-cycle dosing, that will definitely increase compliance."
EPO challenges hardly loom large in Amgen's picture, she said. In Europe, where Amgen licensee Johnson & Johnson, of New Brunswick, N.J., markets Epogen as Eprex, there already is a competing product from Roche that "hasn't taken a significant market share," Gearlds said.
Amgen's pipeline in the long term should be of more concern than how legal appeals turn out, she added.
"If you look at how successful Amgen has been in patent cases so far, I'm not too confident all these rulings will be overturned," Gearlds said. "But we only have a clear indication of where their growth will come in the next two or three years."