IDEC Pharmaceuticals Corp. received FDA approval of Zevalin to treat non-Hodgkin’s lymphoma and is poised to introduce the first radioimmunotherapy to the United States.
Zevalin, a monoclonal antibody linked to the radioisotope Yttrium-90 that targets the CD20 antigen on the surface of mature B cells and B-cell tumors, is indicated for the treatment of relapsed or refractory low-grade, follicular or transformed B-cell non-Hodgkin’s lymphoma, including patients with Rituxan (rituximab)-refractory follicular non-Hodgkin’s lymphoma.
The approval is weighty for both the company and the biotechnology sector, said David Williams, an analyst for Fulcrum Global Partners LLC in New York.
“It means it is [IDEC’s] first wholly owned product,” Williams told BioWorld Today. “It’s going to add a lot to the upside of the company in terms of top-line revenue growth. They are going to go after the European and Japanese markets and it gives them a lot more cash inflow for the remainder of their pipeline. They set a precedent for the rest of the industry.”
IDEC released news of the approval late Tuesday. Its stock (NASDAQ:IDPH) jumped $6.09 Wednesday, or 10.9 percent, to close at $62.10.
IDEC, of San Diego, filed its biologics license application for Zevalin in November 2000. In September, the FDA’s Oncologics Drugs Advisory Committee reviewed the product favorably and the FDA said in January IDEC’s application was approvable, but approvable with a catch the company had to clear up manufacturing issues at its fill/finish provider, Catalytica Pharmaceuticals Inc., located in Greenville, N.C. Those manufacturing issues were estimated to take some time. Lehman Brothers analyst Michael Wood said in a research note that he had expected approval in April or May and a product launch mid-year. (See BioWorld Today, Nov. 2, 2000; May 11, 2001; Sept. 13, 2001; Jan. 9, 2001; and Jan. 10, 2001.)
Not so. With manufacturing issues resolved, IDEC now is ready to go and said it would dispatch commercial shipments of Zevalin in the next 30 to 60 days.
IDEC partnered Zevalin with Schering AG, of Berlin, for sales outside the United States, and its marketing authorization application for the product was accepted for review by the European Medicines Evaluation Agency in January 2001. The deal with Schering was estimated to be worth about $47 million to IDEC at the time, including an up-front payment of $13 million, $15 million in development funding and $19.5 million hinged on milestones. IDEC retains complete rights for Zevalin in the U.S. (See BioWorld Today, June 11, 1999.)
Fulcrum Global’s Williams said his firm expects IDEC will receive royalties from Schering outside the United States similar to the percentage it gets from its licensing deal in the United States with Genentech Inc., of South San Francisco, for Rituxan. That figures to be about 30 percent to 35 percent, he said, but it could be more.
Rituxan was discovered by IDEC and is co-promoted in the U.S. by IDEC and Genentech. F. Hoffmann-La Roche Ltd., of Basel, Switzerland, has marketing rights to the product outside the U.S., and co-promotes Rituxan in Japan with Zenyaku Kogyo Co. Ltd. In 2001, IDEC received $251.4 million in revenue from the commercialization of Rituxan with Genentech, although total net sales for Rituxan in 2001 were $779 million.
The approval coming sooner than expected could allow Zevalin to meet the March 1 deadline for Medicare approval, which would increase Zevalin’s potential sales. Wood’s research note said the Medicare approval process “can take between two and four months” but in the meantime, sales were expected to be reimbursed by private payers. Also, the product can be used by comprehensive cancer centers and academic centers outside the Medicare system.
The worldwide market for Zevalin is about $1.6 billion, Williams said. He is projecting 2002 sales to reach $59.5 million and rise to $195 million in 2003. IDEC had net income of $101.7 million in 2001, with translates to diluted earnings per share of 59 cents, and posted total revenues of $272.7 million. The company had $623.8 million in cash, cash equivalents and securities available for sale as of Dec. 31.
Below Rituxan and Zevalin, IDEC’s pipeline includes IDEC-131, in Phase II trials for a variety of autoimmune-related conditions; IDEC-151, in Phase II trials in combination with methotrexate for rheumatoid arthritis; IDEC-114, in Phase II development for psoriasis; and IDEC-152, in Phase I development for allergic asthma.
The Zevalin approval not only means more revenue for profitable IDEC, but also plows a track for the rest of the radioimmunotherapies, Williams said.
“For other companies developing these types of products since the clinical pathway has now been forged the likelihood that those products could reach the market is higher, in our view,” he said.
IDEC CEO and Chairman William Rastetter, in a prepared statement, said, “This day is the fulfillment of more than a decade of hard work by hundreds of IDEC employees and clinical investigators.”
IDEC officials did not return phone calls seeking comment.