By Randall Osborne


It's a four-chambered muscle about the size of your fist, jumping with each beat (when it's healthy) like a rib-caged animal that wants out.

Said by poets to be the internal headquarters of love, it's the treasure of the chest, the arterial hub, the pump after which engineers consciously or not may have modeled all other pumps.

The heart.

For biotechnology investors, the heart is just another organ, drugs for which may be "played" with profits in mind. And the heart-disease zone is anything but flat-lined, with a trio of would-be blockbuster treatments lined up for market infusion during the next two years.

Late last month, a pulse-stopping (and trial-stopping) failure of Seattle-based Immunex Corp.'s Enbrel (etanercept) for chronic heart failure seemed to take it out of the running. The company halted Phase II/III studies after an independent data monitoring board said the drug, already approved for rheumatoid arthritis, probably would not meet the efficacy endpoints in the heart study.

The news sent Immunex's stock tumbling 38 percent.

Others in the small squadron of potential heart drugs marched on. Boasting a pair are South San Francisco-based Genentech Inc. and Actelion Ltd., a Swiss firm. They are developing Veletri (tezosentan), the first intravenous dual endothelin receptor antagonist in late-stage clinical development for acute heart failure, and Tracleer (bosentan), an oral endothelin receptor antagonist, for heart failure and pulmonary hypertension.

Veletri weighed in last month with positive early Phase III data regarding its effects on blood circulation in heart failure, and other studies are expected to finish in mid-2001. Tracleer, granted orphan drug status by the FDA, proved encouraging for pulmonary hypertension. For heart failure, studies are ongoing.

Scios Inc., of Sunnyvale, Calif., has Natrecor (nesiritide), a recombinant form of B-type natriuretic peptide, as its lead product. In November, Scios said the drug improved the hemodynamic measures associated with acute decompensated congestive heart failure and alleviated dyspnea, or difficulty breathing.

The pivotal Phase III trial met all of its endpoints and exceeded the current standard of care, and Scios said it would file an amended new drug application with the FDA based on findings from the study.

Like AIDS, heart failure is so serious and tricky to medicate that a number of drugs and types of drugs often are deployed which means a wide-open market. Lehman Brothers, of New York, estimates the acute heart failure opportunity at $750 million, whereas the chronic heart failure market numbers in the multibillions.

Like cancer, heart failure is typically fatal, but new targets have become known during recent years. Like diabetes, heart failure still doesn't have the range of treatments needed to master it entirely, and the disease is connected to a host of other serious conditions, such as high blood pressure and kidney trouble.

But heart failure is a problem unto itself and, as Baby Boomers age, the problem is growing by about 10 percent per year. About 975,000 patients are hospitalized annually for acute symptoms. Another 2 million are admitted for primary problems related to the disease.

Lehman Brothers said small molecules for chronic heart failure could total a $1.2 billion market, based on the pricing of $1,800 per year for each patient. The number is congruent with the price of angiotensin II receptor antagonists, often used as therapy today.

Enbrel might have been priced much higher, but that's a moot point now. Before the failure, Lehman Brothers called Enbrel in the heart indication "the single most important reason to own Immunex stock."

There are still other reasons, of course, said Rachel Leheny, head of biotechnology research for Lehman, but "a lot of that was priced into the stock when it was higher. If you were looking at the upside, you had to look at [the heart failure indication]."

In the cardiovascular space, Leheny told BioWorld Financial Watch, "maybe we'd put a little [money] in Immunex anyway, but we might wait a little."

Immunex's failed trial "may actually show efficacy once they do subgroup analysis," she added, speaking late last week. "I was at Immunex the other day, and they said they probably wouldn't have the data from the trial for a couple of months."

Otherwise, at current, lowered levels, the stock is "fairly attractive" in the longer haul, Leheny said. A new Rhode Island facility is expected to ease issues related to manufacturing of Enbrel.

"The timing on manufacturing facility is the middle of next year," according to recent guidance, she said. "But, if there's any slip in that, and they don't secure any other significant means of manufacturing, next year could be low numbers as well."

Acute heart failure drugs might sell $300 million to $700 million per year, although numbers are harder to calculate since most acute therapies are generic, such as nitroglycerin. But treatments for acute-related events myocardial infarction, unstable angina go for $1,000 to $2,000 per treatment.

Investors fixing their gaze on Genentech's cancer franchise may have overlooked the cardiovascular possibilities earlier, Leheny said.

"Before [the meeting last month of the American College of Cardiology (ACC)], a lot of people were focused on Rituxan (rituximab) and Herceptin (trastuzumab)," she said. The former is for relapsed or refractory low-grade or follicular, CD20-positive, B-cell, non-Hodgkin's lymphoma, and the latter is for HER-2-positive metastatic breast cancer.

"Since ACC, people are much more in the learning curve on these drugs," Leheny said. Potential liver toxicity with Tracleer has been fixed, and the drug is shaping up as a $1 billion treatment, with Veletri about half that, Lehman Brothers said in a February research publication. Lehman since has issued a more extensive report.

"The notion of treating somebody in the acute setting and then sending them home with pills is attractive," Leheny said. "We'll see how that plays out."

Scios, meanwhile, has entered a deal with Quintiles Transnational Corp., of Research Triangle Park, N.C., for the naturally occurring peptide treatment, which Lehman Brothers expects to reach $300 million to $500 million in peak sales, after its expected approval in the middle of this year.

"It's going to be positioned against nitroglycerin," Leheny said. "We don't think they will be charging $1,500 per treatment. It's going to be $800, or around that. We think the initial use will be in patients who are either getting nitroglycerin, or would have gotten it, but they don't like it. It's about half the market, and ultimately we think the drug will be used in the whole market."

How to shop, then?

"It's all relative value," Leheny said. "I'd probably buy Scios and Genentech. Scios isn't as big a space, but the stock's cheap. Another good way to play this is to buy Actelion. That's a pure play on [Tracleer and Veletri]."

Solid bets in the cardiovascular space are relatively few, Leheny said which makes things easier on investors. An up-and-coming player is CV Therapeutics Inc. (CVT), of Palo Alto, Calif., which is developing what's billed as a highly selective adenosine receptor antagonist, to treat edema associated with congestive heart failure. CVT and licensee Biogen Inc., of Cambridge, Mass., presented positive results of BG9719 (CVT-124) from a Phase II trial at the ACC meeting.

"That's about it," Leheny said. "If one of these drugs works, there's not a lot of competition. That's what makes it interesting."

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