By Brady Huggett

Just days after Amgen Inc. got regulatory approval for Aranesp, it cut loose two programs it was helping to develop, leaving both Praecis Pharmaceuticals Inc. and Guilford Pharmaceuticals Inc. at least temporarily alone in their own quests for product marketability.

Following last week¿s news that Praecis, of Waltham, Mass., needed further action to support its new drug application for Plenaxis, Amgen, of Thousand Oaks, Calif., ended the companies¿ joint development and commercialization agreement. Plenaxis is designed for hormonally responsive prostate cancer, although Praecis has the product in a Phase II/III trial for endometriosis, a program that now also stands alone. (See BioWorld Today, Sept. 13, 2001.)

Amgen then reached to Baltimore and severed its ties with Guilford, returning all rights for the neuroimmunophilin ligand technology.

¿In both cases, it was a smart move for Amgen,¿ said Janet Gearlds, analyst and portfolio manager at Private Asset Management, Wells Fargo, of San Francisco. ¿With regards to the Plenaxis program, it¿s unfortunate that it didn¿t work out for them. Amgen was co-marketing and co-developing, so the revenue wasn¿t going to be that great. Amgen is really trying to focus on projects that it knows will work, especially with the market the way it is.¿

The way the market is, is unkind to Praecis. The company¿s stock (NASDAQ:PRCS) lost about 28 percent on its FDA-Plenaxis news when the markets reopened Monday, following the four-day respite after the terrorist attacks, and suffered a 20.5 percent loss Wednesday, or $1.02, when Amgen made its decision public. Praecis closed the day at $3.95.

¿The reaction of the market is clearly disproportional to the actual impact,¿ said Malcolm Gefter, chairman, CEO and president of Praecis. ¿All the disproportionality is due to market circumstances. But that¿s twofold. One is the market in general and two is what is the appetite for investors in uncertain areas in uncertain times. You get an amplified affect. The hit is two to three times what it ought to be. No one is giving any credence to the fact that we have clinical trials that have value.¿

Besides Plenaxis, Praecis has a product, Apan, in Phase I trials for Alzheimer¿s disease, and Latranal, a product for chronic back pain, in Phase II.

A lot has happened since Amgen and Praecis signed their deal in March 1999. The effort put forth by both companies now makes the breakup easier to swallow, Gefter said. (See BioWorld Today, March 11, 1999.)

¿We had an arrangement with Amgen whereby, on a going forward basis, we share in 50 percent of the expenses and 50 percent of the profit share. That¿s what the deal had gotten through to this point. When we started, Amgen had to buy into the program, and then we started sharing.¿

As it stands now, if Praecis can get Plenaxis to market and foot the bill, it will reap all financial rewards. The company had about $280 million in cash and equivalents as of June 30.

¿It¿s a neutral event, bordering on positive,¿ Gefter said. And with Plenaxis nearing the end of the clinical mile, the need for a partner is not as severe as it was when Praecis and Amgen first got into bed, Gefter added.

Gearlds said she believes Amgen provided at least $200 million to Praecis since the start of the agreement.

So although Praecis now has to forge on alone, the difference is minimal, Gefter said.

¿There is no operational change at all. We¿ve been doing [pre-marketing research] on a 50-50 basis for a year and a half. This is not something new to us to be exposed to or have to pick up.¿

Gearlds pointed to another reason why Amgen might make the decision to snip the two programs ¿ its Aranesp approval.

¿Obviously, when any product is launched, there will be expenses with that and [Amgen] may be paring down expenses,¿ she said.

In which case, Guilford may just be a casualty of that paring down.

Guilford¿s neuroimmunophilin ligand program is clinically further behind than Plenaxis ¿ interim results from a Phase II trial in Parkinson¿s disease conducted by Amgen were released in July ¿ and Amgen appears to have funneled less money into it: about $60 million overall, said Stacey Jurchison, director of corporate communications at Guilford. But Guilford¿s road ahead has plenty of forks.

¿We had a productive relationship with Amgen and we are sorry to see it end, but we are pleased to regain the rights,¿ Jurchison said. ¿We have a plethora of opportunities available to us that we need to explore and make a determination on.¿

The Phase II trial, done with Amgen, missed all its endpoints, although the analysis wasn¿t fully complete at the time. The trial did show some positive trends, however, that left Jurchison and Guilford optimistic. (See BioWorld Today, July 27, 2001.)

The neuroimmunophilin ligands are believed to have the ability to cause nerve growth and repair, which gives them potential uses in several indications, including Parkinson¿s disease, age-related cognitive impairment and spinal cord injury.

¿There is an opportunity, now that we see activity in these indications, that we could selectively license out,¿ Jurchison said. ¿We certainly can¿t do everything all at once; we don¿t have the resources to do all indications in parallel.¿

Jurchison said the company has planned its third-quarter conference call for November and should be able to provide a better picture as to what its next move for the program would be.

Guilford¿s product, Gliadel Wafer, was scheduled to go before the Oncologic Drugs Advisory Committee (ODAC) Sep. 11, but was canceled due to the attacks in Washington and New York. The matter of rescheduling has not yet been resolved, Jurchison said.

¿We are in discussions with the FDA and the next ODAC meeting is Dec. 6,¿ she said. ¿We hope to have a meeting before that scheduled date. We will be advised in a couple of weeks about that.¿

Amgen¿s stock (NASDAQ:AMGN) fell $1.43 Wednesday, closing at $57.95. Guilford¿s stock (NASDAQ:GLFD) jumped 94 cents, or about 11.5 percent, to close at $9.09.