Amgen Inc. dropped Bioject Medical Technologies Inc.’s Iject and B2000 devices for further development, a move that came as an “absolutely unexpected event,” said Jim O’Shea, Bioject’s chairman, president and CEO.
Amgen elected not to pursue continued development of the two needle-free drug delivery systems in two undisclosed indications, but it would not disclose the reasons for the decision.
“We have ended pursuing development of those projects, but we still do have an agreement with options with [Bioject],” said Jeff Richardson, director of global public relations for Thousand Oaks, Calif.-based Amgen, citing “internal reasons” as to why he could not disclose the motivation behind the decision.
However, in a conference call to discuss the matter, O’Shea said, “There were absolutely no performance issues.”
O’Shea said in the call that Amgen told his company only that the decision was made by an internal steering committee.
Portland, Oregon-based Bioject’s stock took a hit on Wednesday following disclosure of the news after the market closed Tuesday. The shares (NASDAQ:BJCT) fell $5.31, or 56.7 percent, to close at $4.05.
O’Shea noted that Amgen kept its options open to use the Iject and B2000 delivery systems for other undisclosed drugs, but as of Wednesday had not given Bioject “any indication one way or another” whether it would pursue those options.
Bioject and Amgen first entered into a development and supply agreement for delivery of Amgen’s products with Bioject’s Iject needle-free injection system in March 2000. At the time, Amgen made a $1.5 million equity investment in Bioject. (See BioWorld Today, March 2, 2000.)
Bioject signed a second agreement with Amgen in December 2001 that broadened Amgen’s potential use of Bioject’s injection system and included product licensing and commercial supply terms. The agreement called for Bioject to provide Amgen with an exclusive license for use of a modified version of the B2000 system for certain undisclosed therapeutics. In return, Bioject received an up-front payment of $1 million and was to receive development milestones and other payments.
As of March 31, Bioject will have received about $4 million from Amgen, including $2.5 million in development fees and $1.5 million in equity investments, said Cecelia Heer, investor relations manager for Bioject.
Amgen’s decision will not affect Bioject’s collaborations with other companies, O’Shea said. Other partners include Serono SA, of Geneva, which has an exclusive licensing agreement for a third Bioject product, the Vitajet 3 needle-free injection system, to cover exclusive worldwide usage for all current and future Serono growth hormone products and indications. Serono launched Serojet-delivered Serostim for AIDS wasting in the United States earlier this month. Serojet is a customized version of Vitajet 3.
In October, Bioject and Alkermes Inc., of Cambridge, Mass., entered a licensing and development agreement to develop up to three undisclosed drug compounds as proprietary products for Alkermes using Bioject’s Iject and possibly other Bioject needle-free delivery systems.
“We expect to do one to two more deals in the next 12 months,” O’Shea said.
Bioject initiated in January a research agreement with the Memorial-Sloan Kettering Cancer Center in New York to study the efficacy of the B-2000 on immune responses to DNA vaccines for melanoma. The B-2000 device also is being used by the Dale and Betty Bumpers Vaccine Research Center for the clinical testing of its first AIDS vaccine. The center is part of the National Institutes of Health in Bethesda, Md. Bioject has agreements with the National Cancer Institute for lymphoma and the U.S. Naval Resource Center for malaria.
Despite the negative news, Bioject Chief Financial Officer John Gandolfo said that the company would have about $28 million at the end of fiscal year 2002, on March 31, which he expects to provide Bioject with the “necessary resources” as the company “continues toward break-even.”
As a result of the decision, Bioject actually will receive $1 million more in its fourth quarter based on its agreements with Amgen, but Gandolfo said the company would receive about $3 million less in estimated revenues in 2003.
“We do anticipate an increase in revenues over 2002, based on current agreements we have in place,” Gandolfo said, noting that he also expects a “significant decrease” in operating loss.