SangStat Medical Corp., with 12 products in development for thetransplant market, complemented that effort by establishing adistribution channel for the products.

The Menlo Park, Calif., company, which bills itself as TheTransplant Company, said Thursday it established The TransplantPharmacy. SangStat plans to work with transplant centers across theU.S. to promote medication compliance, measure clinical andeconomic outcomes, and provide feedback for physicians.

The service also will provide a direct distribution channel for thecompany's drugs as they reach the market. Toward that end SangStatsaid Thursday it is ahead of schedule in developing a form ofcyclosporine, a potential large-selling product. The company pushedup the time frame for submitting an abbreviated new drug applicationfor its cyclosporine to the first quarter of 1997.

Rachel Leheny, an analyst at New York-based Hambrecht & QuistLLC, said the pharmacy plan could be effective, particularly since itis addressing such a niche market. "I think it's pretty exciting," shesaid. "With this managed care environment this type of idea willprobably go over well."

Leheny said SangStat could enhance its market position with thepharmacy operation.

Barbara Hoffman, an analyst at Vector Securities International Inc. inDeerfield, Ill., also liked the pharmacy idea. "This is one of the fewbiotech companies built around a business plan. This is furtherexecution of that business strategy."

Hoffman said the pharmacy will add value for physicians and alsohelp the company establish relationships with physicians. She saidSangStat would be able to detail its products to the physiciansbecause of the targeted market.

Philippe Pouletty, SangStat's chairman and CEO, said, "Initially mostof the products offered by The Transplant Pharmacy will come fromother pharmaceutical companies. Later SangStat products will beoffered. However, The Transplant Pharmacy will not restrict itsproduct line to SangStat products."

Running a distribution service that sells drugs from the company andits competitors provides built-in competitive advantages. Poulettystressed, however, that decisions on which drugs to provide topatients will remain with physicians.

SangStat plans to set up pilot programs at different centersthroughout the country. Two centers already have been selected forinclusion. A program at the University of Tennessee Bowld HospitalOrgan Transplant Center began operations Wednesday. And one atthe Stanford University Multi-Organ Transplant Program is expectedto be running by the end of the year.

Leheny said SangStat is targeting 20 centers, which would put thecompany in direct contact with 20,000 patients. There are about100,000 transplant patients in the U.S. and the market is growingabout 10 to 15 percent annually.

The pharmacy will provide an integrated distribution system fordispensing products through the mail to transplant recipients enrolledin the program. Transplant patients take several drugs each day andrequire frequent monitoring of the medication.

"Better integration of pharmacy services for outpatients should helpimprove post-transplant outcomes as well as reduce overall transplantcosts," Pouletty said. "It's a key piece of our disease managementapproach."

Leheny said the program shouldn't cost much to implement andshould prove to be cost efficient for SangStat.

SangStat expects analysis of a Phase III trial of another product,Thymoglobulin, to be complete in October. Assuming positiveresults, a product license application will be filed by the end of theyear, Pouletty said. The product is a rabbit anti-thymocyte polyclonalantibody for treating acute graft rejection. SangStat licensed rights inthe U.S. and Canada from Pasteur Merieux Connaught, of Lyon,France, which sells the product in at least 39 countries.

The cyclosporine drug, for chronic immunosuppressive therapy, willaddress a market that was $1.2 billion in 1995. A filing forAzathioprine, another drug for immunosuppresive therapy, isexpected in the first half of 1997. The company already is marketingtwo products to improve donor-recipient compatibility, and has anumber of other products in development. n

-- Jim Shrine

(c) 1997 American Health Consultants. All rights reserved.

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