By Matthew Willett
QLT Inc. said reaction to its announcement of slower-than-expected Visudyne growth was greatly exaggerated, and that the drug still is bound for blockbuster status with projected sales of $500 million to $600 million in a peak year.
QLT's stock dropped 31 percent on the news Thursday, or $12.375, to close at $28.062.
Reimbursement issues and a weak European currency market have held the drug's sales back, QLT said.
But QLT President and CEO Julia Levy said the future is still bright for the macular degeneration therapeutic, which is expected to log $36 million to $38 million in sales in the fourth quarter.
"I think the future holds exactly what it did yesterday in terms of long-term value for this product," Levy told BioWorld Today. "Our 2000 projection was sales of $100 million, and we're coming in at about $98 million. There were reimbursement issues that proved extremely difficult, more so than we thought, but they're behind us now and we think it's a very good product."
Lehman Brothers Analyst Joe Dougherty echoed Levy's optimism, though he said the expectations will put QLT in the position to prove itself.
"I think there's been a bit of controversy about Visudyne, as is fairly common with a new drug in a new area," Dougherty said. "I think the announcement sort of puts the onus on QLT now, and its partner CIBA Vision, to put up some good sales figures."
Visudyne therapy involves an intravenous injection of the drug, which selectively accumulates in abnormal blood vessels in the macula, the central part of the retina. Those abnormal blood vessels are characteristic of the classic wet form of age-related macular degeneration.
Once accumulated, the drug is activated by a nonthermal red laser shined in a patient's eye. Activation stops the growth of the abnormal blood vessels, thus stopping vision loss.
Visudyne was approved in the U.S. for treatment of the wet form of age-related macular degeneration in April. (See BioWorld Today, April 14, 2000.)
Vancouver, British Columbia-based QLT partnered with CIBA Vision, of Atlanta, the eye-care arm of Novartis AG, of Basel, Switzerland, for development of the drug, and the companies share marketing costs. Profits from the therapy's sales are split equally.
Levy said projections for Visudyne sales haven't changed much. She pointed out that the drug is still the top-selling ocular product ever. For 2001, however, she said QLT will make its estimates known to analysts to try to avoid out-of-line expectations.
"We haven't done anything this year; we didn't give any guidance," she said. "In 2001 we'll give our own estimates, or at least let analysts know what they are. We've actually already made our projections for 2001, $240 million to $260 million, and analyst's projections were about $266 million on average."
She added the company is preparing to market the therapy for further indications as well. She said QLT expects to see Visudyne approved for pathologic myopia in the first quarter of 2001, an additional indication that could add 50,000 patients to the drug's market.
"That indication should have an impact in the second half of the year," she said.
Dougherty agreed that the announcement of lower-than-expected sales of Visudyne shouldn't be taken as an indication of the drug's likelihood for success.
"I would look at this as saying that it's earlier in the ramp, rather than that the ramp is lower," he said. "I still expect Visudyne to be a very successful drug. It has a compelling case, a compelling medical need, and there's an extreme absence of alternative therapies. There are good economics for doctors. All the stars are aligned."