By Jim Shrine

Special to BioWorld Today

Centocor Inc. presented formally to analysts for the first time late last week, telling them of an expanded clinical development program, and then Friday sold its oncology diagnostics business as expected for $37.5 million in a move to help focus efforts on therapeutics.

Officials of the Malvern, Pa.-based company Thursday disclosed new therapeutic targets and expanded indications for three approved drugs, as well as new products deeper in the pipeline, helping push the stock (NASDAQ:CNTO) up $3.50. It retreated some on Friday, closing down $0.125 at $44.50.

"The overall message was they have a very in-depth strategic plan that looks very straightforward and very credible," Jay Silverman, senior biotechnology analyst at BancBoston Robertson Stephens in New York, told BioWorld Today. "There was a very good feeling that this can actually happen in terms of them executing on this plan."

Silverman said Centocor officials removed some lingering doubt that remained from recent unrealized expectations, such as the company's falling about $3 million short of analysts' projections of $90 million in ReoPro sales for the third quarter.

"People feel a lot more confident in management's ability to execute than before the meeting," Silverman said.

Centocor, in addition to briefing analysts on later-stage trials and new indications for three existing products — ReoPro, Retavase and Remicade — unveiled two new monoclonal antibody product candidates, designed to attack the cytokines interleukin-6 and interleukin-12. IL-6 and IL-12 are implicated in autoimmune and inflammatory diseases including ulcerative colitis, asthma, psoriasis and rheumatoid arthritis.

Trials of those antibodies are expected to begin in 2000, the company said.

Several New Initiatives Under Way

A look at the antiplatelet drug ReoPro for peripheral vascular disease was new, as is the study of Remicade for asthma, psoriasis and multiple myeloma, Centocor spokesman Christopher Allman said, adding that an early study in multiple myeloma already is under way.

Data from Phase II studies of TIMI 14 and SPEED, involving the combination of ReoPro and the fibrinolytic Retavase in acute myocardial infarction, will be presented at next week's American Heart Association meeting in Dallas. Individually, ReoPro is in a Phase III trial for unstable angina and in Phase II for stroke, and Retavase is being tested in heart attack patients before they reach the emergency room.

Phase III results of Remicade in rheumatoid arthritis will be presented Nov. 12 in San Diego at the American College of Rheumatology meeting, with a Biologics License Application expected by the end of the year or early in 1999. That monoclonal antibody-based product targets tumor necrosis factor-alpha and already is approved for Crohn's disease.

"They are going to put a lot of resources and a lot of clinical trials behind their three drugs," Silverman said. "They do clinical trials very well. All three should be class-leading, high-growth drugs. They are doing exactly what the should do to maximize shareholder value."

Part of that, he said, included the sales of the oncology diagnostics business. The sale, to Fujirebio Inc. of Japan, is expected to net Centocor a one-time, after-tax gain of $15 million, or 20 cents per share. That diagnostics business includes monoclonal antibody-based immunoassays for detection and monitoring of solid tumors.

The Money's In The Pharma Sector

Silverman said the sale is a plus in two ways. First, it shows Centocor following through on what it said it would do. Secondly, he said, "it's a low-growth, low-margin business that has been a drag on their income statement. The money and the growth are in the pharmaceuticals business."

Allman said that while Centocor has met individually with analysts, the Thursday meeting in New York was the first time the company held a conference with all the analysts. "In a way, it was like a coming-out party for Centocor," he told BioWorld Today.

"We were able to demonstrate to the analysts the strength we have in senior management," Allman said, "and our strategic plan to sustain growth in the future. We highlighted the speed factor involved in all three of our drugs. The faster you get patients treated, the quicker they are out of the hospital, and that provides cost benefits not only to the patients but the whole health care system."

Finally, Silverman said, Centocor's recent hiring of Jason Rubin as vice president of corporate communications is less tangible than the drug-related news, but important to the company and its stock price nevertheless. Rubin previously worked at Cephalon Inc., of West Chester, Pa., as well as other firms.

"Their communications program with the Street has been somewhat lacking," Silverman said. "Centocor never put a lot of value on that function in terms of thinking it was important for the stock price. For analysts and investors it's critically important."

Allman said the hiring of Rubin "adds to the evolution we're going through, from being a traditional research and development shop to a fully integrated biopharmaceutical company." *