By Randall Osborne

West Coast Editor

Like unwed parents disputing the custody of kids, Genentech Inc. and Tanox Inc. agreed in 1996 to end their lawsuits over monoclonal antibodies for allergies and asthma, and team up to get a drug to market ¿ but now their oldest metaphorical child, named Xolair (omalizumab), is in trouble with the FDA.

The agency said the biologics license application filed by Genentech and pharmaceutical partner Novartis AG requires more data, which may come from ongoing studies.

¿This is a numbers game,¿ said Carol Werther, analyst and managing director of biotechnology with Adams, Harkness & Hill in Boston. ¿If I were the FDA, and I was worried about safety, I¿d want to see the data [Genentech is] collecting now.¿

Because Xolair could be the first biologic available for the treatment of asthma and seasonal allergic rhinitis, and the potential number of sniffly, short-of-breath users is so large, the FDA wants to be certain, Werther said.

Shelley Schneiderman, manager of corporate communications for Genentech, said the complete response letter asking for more data means that the drug won¿t make an earlier estimate of 2001 for approval.

Submitting the BLA for the second time could take place as late as 2003, after which the FDA has another six months to act, she said.

¿The best-case scenario is that they accept [data now available from ongoing trials], and we don¿t have a huge time delay,¿ Schneiderman added, but whether the FDA will require more studies won¿t be known until Genentech meets with the agency.

Houston-based Tanox¿s stock (NASDAQ:TNOX) took the biggest hit Tuesday, tumbling 44 percent, closing at $14.02, down $11.16. Genentech (NASDAQ:DNA) fell nearly 16 percent, or $8.26, to end the day at $43.85. Shares of Novartis (NYSE:NVS), of Basel, Switzerland, dipped $1.27, or 3.7 percent, closing at $33.13.

FDA officials seemed to indicate earlier that the data already submitted from ongoing trials ¿ which Werther said Genentech described as ¿clean¿ ¿ would be satisfactory, she noted.

¿I think they changed their mind, and they want to see more safety up front,¿ Werther told BioWorld Today.

Schneiderman said Genentech was ¿aware [the FDA] would want some additional information, but we were hoping we could provide it in a post-marketing context rather than a pre-approval context.¿

Werther pointed to a primate study in which some animals developed low platelet counts and some of them died, according to Genentech in September of last year. Although Werther said in a research note that these effects were probably ¿species specific,¿ the FDA must ask wide-ranging questions.

¿How many patients do you have to give the drug to, to see uncommon side effects?¿ she said. ¿You¿re looking for something serious 1 percent of the time, or even less.¿

Schneiderman said the platelet problem with some primates occurred not in experiments with Xolair, but with a related compound.

¿We¿ve tested it in other species of monkey and not seen that event,¿ she told BioWorld Today. In any case, she said, the FDA letter did not address platelets but dealt with the ¿general theme¿ of needing data regarding ¿additional patient experience.¿

The letter addresses ¿the theoretical, uncommon safety events that could occur in 2 million people that we didn¿t see in 2,000 people,¿ Schneiderman said.

Xolair, which works by binding to immunoglobulin E (the antibody that triggers release of inflammatory mediators), is ¿a very new class of compound,¿ she noted.

In the second time around with the BLA, developers of Xolair will seek a label that would direct the drug only at adult patients with allergic asthma, and have two ongoing Phase IIIb trials related to that indication. ¿With children, they just don¿t have a big enough database,¿ Werther said.

The ALTO safety study is testing 900 patients already taking other therapies, and the TENOR study is an observational trial of 5,000 patients.

Genentech¿s first BLA sought a label for patients ages 6 through 75, Schneiderman said, although only 334 pediatric patients have been tested.

¿I don¿t think [the changed label request] writes off too large a chunk of the market,¿ she said, adding that the exact, eventual market for Xolair is not certain, although about 40 million people suffer with seasonal allergic rhinitis, and 17 million with asthma.

Newly assembled data also will go to the European Medicines Evaluations Agency, which means an approval delay outside the U.S., too.

Werther noted the weakness in Genentech¿s stock as a result of Tuesday¿s news made it a good buy, especially since the biotechnology giant¿s pipeline is otherwise healthy.

¿There are other things that can offset [the Xolair snag],¿ she said. ¿And, if they delay the launch, they delay the marketing expenses, too.¿

Two marketed products ¿ Herceptin (trastuzumab), an anti-HER2 antibody for breast cancer, and Rituxan (rituximab) for relapsed or refractory low-grade or follicular, CD20-positive, B-cell, non-Hodgkin¿s lymphoma ¿ continue to do well.

Genentech is expected to report second-quarter earnings after the market closes today, and Werther estimated Rituxan sales would check in at $200 million, Herceptin at $84 million.

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