By Randall Osborne
When an FDA advisory panel recommended approval of Chiron Corp.'s Proleukin for metastatic melanoma, the company finished last week batting two for three in its bid for drug approvals — and hoping for more applications of Proleukin, which already was cleared for use against kidney cancer.
At mid-week, the FDA approved Regranex (becaplermin) Gel for diabetic foot ulcers developed in collaboration with Johnson & Johnson, of New Brunswick, N.J. The gel, whose active ingredient is recombinant human platelet derived growth factor, was slated for a February launch. (See BioWorld Today, Dec. 18, 1997, p. 1.)
A day later, the Oncologic Drugs Advisory Committee rejected Emeryville, Calif.-based Chiron's anticancer drug DepoCyt for neoplastic meningitis. The drug was developed in a partnership with San Diego-based DepoTech Corp.
Then came word that the same panel had given its nod to Proleukin (aldesleukin), Chiron's injectable recombinant form of interleukin-2 (IL-2). The drug was approved for renal cell carcinoma in May 1992, and Chiron submitted its biologics license application (BLA) for melanoma in April this year. (See BioWorld Today, May 6, 1992, p. 1 and April 15, 1997, p. 1.)
Other Proleukin Targets Include AIDS
Julie Wood, spokesperson for Chiron, said Proleukin is being investigated in other applications.
"We have other trials ongoing, directly and through collaborators," she said. "The most visible area has been HIV. We're supporting a Phase III trial planned by the National Institutes of Health."
Because of its toxicity, the cytokine IL-2 has been used in limited indications. But in July researchers at the New York Hospital-Cornell University Medical Center, of New York, said low doses showed positive results when administered to asymptomatic HIV-positive patients. (See BioWorld Today, July 15, 1997, p. 1.)
"We don't know the exact mechanism of action, but we know it stimulates the immune system," Wood said. The low-dose IL-2 treatment, used with customary triple antiviral therapy, boosted CD4+ T cells and increased the number of natural killer cells, monocytes and eosinophils.
"We also have studies in acute leukemia and non-Hodgkin's lymphoma," Wood said.
Peter Ginsberg, an analyst with Piper Jaffray Inc., of Minneapolis, recommended Chiron's stock as an "aggressive buy" the day after the FDA panel turned thumbs-down on DepoCyt for neoplastic meningitis.
"The stock really has not been all that volatile in the past week," Ginsberg said, following news of the FDA panel's recommendation of Proleukin for metastatic melanoma.
"We didn't change our estimate for next year at all on the DepoCyt news," Ginsberg said. "Chiron's got a revenue base of more than a billion dollars." Ginsberg's one-year price target for Chiron's stock is $22.
"We upgraded the stock a week ago, because it had gotten to its low price and we saw these important events upcoming," Ginsberg said. By far the most important was the approval of Regranex, he added, estimating peak sales of the product at $300 million.
"Chiron gets 30 percent of that," Ginsberg said. "Peak sales for DepoCyt were only estimated at $50 million to $60 million."
Adding to Chiron stock's future value, Ginsberg said, is a new CEO, who is expected to be hired "in the next month or so. That new CEO will, we think, drive the restructuring of Chiron to improve its profitability."
In the second quarter of 1997, Chiron's product sales rose less than 1 percent over the same period last year, net income went up 2 percent and earnings per share were unchanged at 9 cents. The company's third-quarter report showed a net loss of $14 million, or 8 cents per share, largely as a result of a one-time charge against earnings to write off the company's Puerto Rican manufacturing plant and other internal maneuvers to restructure and consolidate. (See BioWorld Today, July 25, 1997, p. 1 and October 29, 1997, p. 1.)
Ginsberg said Chiron is due for an upswing. "We're at an inflection point, at a low that's soon to go up," he said.
Chiron's shares (NASDAQ:CHIR) closed last Tuesday at $16.875, down $0.062.*