By Randall Osborne

Editor

One of the historic leaps or lurches, anyway of biotechnology's stop-start growth was marked by the approval in 1995 of Malvern, Pa.-based Centocor Inc.'s clot-buster Reopro (partnered with Eli Lilly and Co., of Indianapolis), which many say was the bellwether for monoclonal antibodies as "magic bullets" against disease.

By the time genomics came along and swept everything into the background, the excitement over "monoclonals," as they're called, had begun to wane. But they're still very much in the game, especially against cancer, and investors would do well to get carefully aboard, says a new report by San Jose, Calif.-based Frost & Sullivan.

The report looks at first like one of those vague "overview" jobs that are the specialty of consulting firms, and tend to bring jeers from savvy industry watchers, who may view such surveys as misguided, pointless, or both.

"Key issues and trends are highlighted and discussed relative to the future of the market," promises Page 1 of the report, which covers the years 1996 to 2006, with 1999 as the base year. It goes on to make solid points, with specific predictions using actual data.

Frost & Sullivan had no one available to comment on the report, which speaks for itself anyway, and provides an overview of monoclonals in cancer an area in which John Alsenas, portfolio manager with ING Furman Selz Asset Management, said they are especially well suited.

"When people discover something, they get all excited," he said. "It's the Tao, the path, the way." Monoclonals aren't quite that grand, Alsenas said. Leukemias, he noted, which monoclonals often are used against, "have always been easier cancers to treat.

"But there's been nothing interesting in cancer in a long time, just small, incremental improvements," said Alsenas. "People have been talking about the resurgence of monoclonals for several years," he said.

Success stories are well known and often recited. South San Francisco-based Genentech Inc.'s Herceptin (trastuzumab), which binds to the HER-2 tyrosine kinase receptor, a protein of which certain breast cancer patients have a genetic abundance, is the only monoclonal approved for solid tumors.

Rituxan (rituximab), developed by IDEC Pharmaceuticals Corp., of San Diego, and marketed by Genentech, is a monoclonal for non-Hodgkin's lymphoma, which most often expresses the CD20 antigen to which Rituxan binds on lymphoma cells and normal B cells. It was approved in 1997, but Herceptin given the FDA's nod in 1998 is the only monoclonal on the market for solid tumors.

Five more are expected to launch through 2006, the report says.

New York-based ImClone Systems Inc.'s monoclonal cetuximab targets head and neck as well as colorectal cancer. Now in Phase III trials, it's likely to be launched later this year.

Medarex Inc., of Princeton, N.J., is advancing MDX-447 for head and neck cancer in tumors that express the epidermal growth factor, and MDX-210 for prostate and renal cancer. AltaRex Corp., of Waltham, Mass., and London-based Antisoma plc, have OvaRex and TheraGyn, respectively, undergoing tests against ovarian cancer.

If all five launch by 2006, the market for monoclonals as therapeutics for solid tumors will surpass $1 billion by that year, with a compound annual growth rate of 27.4 percent.

In anti-angiogenesis, the study predicts, only one monoclonal will gain approval during the forecast period, and it belongs, again, to Genentech. The company's monoclonal to vascular endothelial growth factor (rhuMAb-VEGF) is aimed at three indications: colorectal cancer, non-small-cell lung cancer and metastatic breast cancer.

In hematological malignancies such as leukemias and lymphomas, for which monoclonals are "ideally suited," Rituxan was the first, setting a record for any anticancer agent's first year sales: $152 million in 1998. The market for this segment is expected to achieve a compound annual growth rate of 25.4 percent during the period covered by the survey.

Through 2006, three more are expected to win approval: Seattle-based Corixa Corp.'s Bexxar, an antibody specific to the CD20 antigen on B cells conjugated to radioactive iodine-131, and IDEC's Zevalin (ibritumomab tiuxetan), both for non-Hodgkin's lymphoma; and Fremont, Calif.-based Protein Design Labs Inc.'s SMART M195, for acute myelogenous leukemia.

Also in the works is Campath, San Antonio-based Ilex Oncology Inc.'s leukemia drug, held up in March for as long as 60 days by the overloaded FDA. Ilex is developing the drug through a 50-50 joint venture with Millennium Pharmaceuticals Inc., of Cambridge, Mass.

Monoclonals for breast cancer and B-cell non-Hodgkin's lymphomas are among the best weapons available, and the total market for monoclonal antibody cancer therapeutics is expected to generate $2.5 billion in sales by 2006, the report says.

But those aiming to drop money into the monoclonals-against-cancer space are wise to be as selective about it as the best chemotherapy is selective against tumor cells, Alsenas said, adding that monoclonals have come far in the past few years, and may yet go further.

When monoclonals were first created in mice, "the problem was that they were mouse antibodies," he told BioWorld Financial Watch. "With the advent of chimeric antibodies, we learned to get the variable regions from the mouse and splice off the fixed region. That was a step forward, but it still wasn't perfectly humanized."

Next came "technology that was developed to get rid of, in the chimeric antibodies, the little bits of mouse that were left," he said. This was followed by the likes of Abgenix Inc., of Fremont, Calif., with its mouse for making fully human antibodies.

"Then Cambridge Antibody Technology [Group plc (CAT)] came along and said, 'Let's take the animal out of it entirely, and use phage display,'" Alsenas said.

CAT, of Melbourn, UK, produces fully human antibodies derived from phage display technologies, with a library of about 100 billion human antibodies.

All in all, Alsenas said, injectable monoclonals amount to "a shortcut. It's a quick way of coming up with something that will stick to whatever your target is. But it's not perfect. The perfect thing is to have a small molecule, an organic compound that can be reproduced easily in the factory."

Such drugs as Enbrel and Remicade are "very successful drugs," Alsenas acknowledged, "but people are still looking for a pill."

Remicade (infliximab) is Centocor's arthritis drug. Enbrel (etanercept) was developed by Immunex Corp., of Seattle, also for arthritis.

The former blocks the activity of tumor necrosis factor-alpha (TNF-a), a key inflammatory mediator, on the cell membrane and in the blood. Overproduction of TNF-a leads to inflammation in rheumatoid arthritis, Crohn's disease and other autoimmune diseases. Remicade in combination with methotrexate was approved in 1999.

In February, Scios Inc., of Sunnyvale, Calif., started a Phase Ib study of SCIO-469, an oral p38 kinase inhibitor for rheumatoid arthritis.

"I don't think efforts toward the oral TNF receptor are going to bear fruit," Alsenas said but the effort is more than worth undertaking.

Monoclonals, he said, "are interim steps, but every once in a while, they're better than good interim steps, because they can also be engineered to destroy what they bind to," making them excellent candidates as cancer drugs.

At the same time, Alsenas said, "it's not always possible to develop a monoclonal antibody to a target, because the target has to be antigenic you have to find some way of making the immune system recognize it. One of the problems with vaccines and antibodies to certain cancer targets is that they are already pretty much normal cellular constituents, overexpressed."

Enter CAT, and Ribozyme Pharmaceuticals Inc., of Boulder, Colo.

The former's phage display represents "the furthest evolution from the discovery of monoclonal antibodies. On the other hand, in biology there's so much evolution and creativity that sometimes the animal system may be able to come up with a construct, an antibody, that won't occur in the somewhat limited, artificial system."

Ribozyme Pharmaceuticals takes a still different approach.

"As long as they know the DNA sequence of a target, they can create a ribozyme essentially an enzyme, in this case messenger RNA to cut up the message before it even gets to the protein," he said.

For investors, the smartest approach is conservative, Alsenas said.

"In the end, the only thing that creates value is something in a bottle which can be sold," he said. "The closer you are to that step, the more interesting the company is going to be."

Such firms as Abgenix and Medarex, of Princeton, N.J., with their antibody mice, are important, Alsenas said.

"It's not a technology risk, since in most cases they will come up with an antibody, but you've still got the target risk," he said. "If you can't get the target recognized antigenically by the mice, it's difficult to get a high-affinity antibody out of it.

"The other question is, what does [the company] look like as a stock? That's a separate question."

The key in sorting monoclonal firms? Look for late-stage products, and companies priced intelligently.

"Last summer, valuations were insane," Alsenas said. "Stocks were priced to perfection. Things have come down a lot, but if you look at them rationally, they're still kind of expensive."

Costly or not, he said, "you want to find [firms with drug candidates] that have a certain air of inevitability about them. The best thing you can do is find a product people need, and a company not crazily valued. Look at it that way."

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