By Randall Osborne

West Coast Editor

In the wake of sales reported by Genentech Inc. for Rituxan (rituximab) that were lower than some analysts had forecast, partner IDEC Pharmaceuticals Inc. saw its stock (NASDAQ:IDPH) drop more than 15 percent.

The price fall came despite good news ¿ or at least not bad news ¿ regarding IDEC¿s radiolabeled treatment for non-Hodgkin¿s lymphoma, Zevalin (ibritumomab tiuxetan), which is pending with the FDA and for which the company said it has provided additional data sought by the agency.

Apparently, a glitch in reporting by the Westport, Conn.-based drug sales forecasting firm, IMS Health, led some analysts to shoot high in their estimates. Thus, when the true numbers were reported by Genentech, of South San Francisco, after the market closed Wednesday, sales seemed to come in ¿low.¿

Some investors didn¿t pause to analyze the situation. IDEC closed Thursday at $52.16, down $9.32, after dropping as low as $49.50. Genentech¿s shares (NYSE:DNA) ended the day at $40.20, down $2.55, or 5.96 percent.

IMS did not return phone calls. Its shares (NYSE:RX) rose Thursday, ending at $27.60, up 64 cents, or 2.37 percent.

¿It¿s an unfortunate situation,¿ said Connie Matsui, senior vice president of planing and resource development for San Diego-based IDEC. ¿Neither Genentech nor IDEC comments on the sales, except in our quarterly conference calls, and the only surrogate that analysts have is a commercial forecasting service that looks at wholesale demand.¿

IMS seems to ¿have double-counted some growth during the quarter, and so analysts were driving their numbers off this data, which are not published by us or by Genentech,¿ Matsui told BioWorld Today. ¿That¿s where things have gotten overheated.¿

Meirav Chovav, analyst with Credit Suisse First Boston in New York, didn¿t buy the IMS numbers in the first place.

¿I¿m not sure what happened there, but whatever happened was a mistake,¿ she said, noting that Genentech said the same about the IMS numbers in its conference call regarding earnings, which included second-quarter sales for Rituxan of $187.7 million ¿ still an 83 percent jump over $102.8 million in the second quarter of last year.

In February, IMS¿s estimate for the second quarter of 2001 was $165 million, in March $175 million, ¿and suddenly in April it went to $233 million, and we didn¿t think it was real,¿ Chovav told BioWorld Today. ¿Nothing special happened between the two months. We would have expected it to be about $185 million.¿

Chovav said her firm contacted IMS about the seeming discrepancy.

¿They denied anything was amiss,¿ she said. ¿Then, in May, [the quarterly estimate] came in at over $240 million. We went with $200 million, because I just didn¿t believe those numbers.¿

Even with the perceived shortfall in Rituxan sales, Genentech reported a 28 percent rise in net income and a 27 percent increase in earnings per share, thanks to a 33 percent hike in overall product sales in the second quarter.

Zevalin, the IDEC drug pending with the FDA, is a mouse monoclonal antibody targeted against the CD20 antigen found on normal mature B cells and cancerous B cells and is conjugated to a yttrium-90 radioisotope. It is administered with Rituxan. The FDA asked for further data on Zevalin in a complete review letter two months ago. (See BioWorld Today, May 11, 2001.)

IDEC wants marketing approval of Zevalin for low-grade, follicular, CD20-positive transformed, relapsed or refractory, B-cell non-Hodgkin¿s lymphoma. Rituxan also is for refractory follicular NHL. Zevalin is partnered with Schering AG, of Berlin, outside the U.S., and the overseas partner for Rituxan is F. Hoffmann-La Roche AG, of Basel, Switzerland.

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