By Randall Osborne
West Coast Editor
A month after its psoriasis drug failed to meet the primary endpoint of a Phase II trial, Corixa Corp. said the FDA is asking for more information regarding the company's biologics license application for its lead product, Bexxar, a treatment for non-Hodgkin's lymphoma.
Seattle-based Corixa's stock (NASDAQ:CRXA) fell more than 14 percent on the news, closing Monday at $9.50, down $1.562, after dropping as low as $8.437. The company said its complete review letter from the FDA arrived Friday night, after the market had closed.
The stock is "at its low," said Mark Monane, analyst and vice president of biotechnology with Needham & Co., of New York. "This is a buying opportunity." Monane, who initiated coverage earlier this month with a "buy" rating, said he was sticking to his guns.
"Wall Street appears to have been looking for a 2001 launch, and that's obviously not going to happen," he told BioWorld Today. "I didn't think it would, and I have been closer to the story in the short run. The good news is, Corixa doesn't have to do any more studies, at this point."
Monane said when he started coverage that Bexxar likely would launch in the third quarter of 2002. Under that schedule, he said, it's on track.
Steven Gillis, chairman and CEO of Corixa, said during a conference call that the company aims to answer all of the FDA's questions in three months. He said he expects the agency then to start another six-month review cycle for Bexxar, which is partnered with UK-based GlaxoSmithKline plc, and has been granted priority evaluation as an orphan drug.
Meanwhile, Gillis said staff reductions will mean a first-quarter charge of about $1.5 million, and could result in annual cost savings of about $6 million. Cash receipts will also drop by $5 million to $10 million, he said, bringing the amount to between $70 million and $90 million in 2001.
Gillis said that after the cutbacks Monday the company will have 512 employees at three locations, a drop of 10 percent to 15 percent.
Gillis estimated revised annual expenditures this year between $145 million and $155 million, with an unchanged burn rate of $60 million to $70 million. As of Dec. 31, Corixa had $197 million in cash.
The FDA, which accepted the Bexxar BLA in November, said it wants more safety and efficacy data, and Gillis said the company may be able to fulfill the requests from results of trials already concluded.
Those trials compared safety and efficacy in low-grade non-Hodgkin's lymphoma patients treated either with Bexxar or its unlabeled antibody; they assessed safety and efficacy in treating relapsed, refractory low-grade disease in patients who didn't respond to Rituxan (rituximab); and they tested Bexxar as a front-line therapy in low-grade cases.
Also, the FDA is asking for more documentation, analysis and confirmation of response in low-grade patients, including those with transformed low-grade lymphoma, along with information about "certain adverse events," and long-term follow-up on patients' thyroid function.
"I think the agency is interested in recovery of hematologic capabilities following Bexxar administration, predominantly white blood cell counts," Gillis said.
Those treated with Bexxar show "remarkably long responses," he added. "In fact, the long-term follow-up that has been requested is well beyond what was called for in all of the protocols covering clinical examination of Bexxar."
The FDA further seeks dosimetry calculations on certain patients whose response data were included in the BLA; documentation and test results validating production process and release tests; and more information supporting the comparability of tositumomab made by various suppliers during the course of Bexxar's clinical development.
"We have no indication from the agency of a request for bridging studies," Gillis said. "They are just requesting further documentation of comparability of [the] background antibody. This is not a bioequivalence issue - it is a chemical characterization issue," he said, adding that the agency only wants "us to provide raw data in certain manufacturing processes to confirm our conclusion."
In February, Corixa's shares fell 22 percent on news that PVAC, its psoriasis treatment, failed to meet the primary endpoint in a 241-patient Phase II trial. The drug, however, based on a proprietary process and formulation derived from heat-killed Mycobacterium vaccae, produced a positive response compared to control. (See BioWorld Today, Feb. 16, 2000.)
Gillis said none of the company's major programs will be affected by the changes wrought as a result of the FDA delay. He noted that some of the personnel cutbacks are called for, given the "additional synergies we have uncovered as a result of operating as a combined company for the past three months," after the Coulter Pharmaceuticals Inc. buyout.
Corixa acquired Coulter and its Bexxar drug candidate in October 2000 in a stock deal valued then at more than $900 million. (See BioWorld Today, Oct. 17, 2000.)
"The programs that will be postponed will become the focus of out-licensing," Gillis said. These are clinical stage or near clinical stage, he added.
"I don't believe this marks a return to the path of partnering early, and partnering often," Gillis said, although such activities "will intensify on a territory-specific basis."
Monane said the FDA "has been very cautious lately - we've had a record number of drug recalls over the past two years. I've been following Campath, which is in the 15th month of its 'six-month review.'"
Campath is San Antonio-based Ilex Oncology Inc.'s leukemia drug, lately held up for as long as 60 days more by the overloaded FDA. Ilex is developing the monoclonal antibody through a 50-50 joint venture with Millennium Pharmaceuticals Inc., of Cambridge, Mass. (See BioWorld Today, Feb. 15, 2001.)
Corixa submitted the BLA for Bexxar in September, Monane noted. "It's been quite a while, and they've done quite a few studies since then," from which more information can be drawn to satisfy the FDA, he said.