The FDA approved the first liposomal product formarketing in the U.S. as Sequus Pharmaceuticals Inc. gotpermission to sell Doxil for refractory Kaposi's sarcomain AIDS patients.

Sequus, of Menlo Park, Calif., said Monday it has a salesstaff of 22 in place. Product launch will be made over thenext several weeks if company officials can implementsmall packaging changes requested by the FDA. Still tobe finalized, is the price, which Sequus officials saidshould be less than Taxol, meaning the drug could cost$1,000 to $1,200 per cycle for Kaposi's sarcoma.

Doxil contains the generic cancer drug doxorubicinencapsulated in microscopic lipid spheres. Polyethyleneglycol attached to the liposomes helps give Doxil acirculating half-life of 50 hours compared to 10 minutesfor free doxorubicin, the company said.

While the market for second-line Kaposi's sarcoma drugsis not that large, Sequus also is developing the drug forother indications, particularly for solid tumors, where it isbeing tested in a variety of studies.

Ed Hurwitz, an analyst with San Francisco-basedRobertson, Stephens & Co., estimated 1996 revenues ofDoxil at $15 million to $20 million, with sales up to $45million in 1997 and nearing $100 million in 1998. Afterthat growth will take off because of wider use in solidtumor indications, he said.

Kaposi's sarcoma appears as reddish or purple lesions onthe skin that form when capillaries begin to growirregularly and rapidly. It affects less than 20 percent ofAIDS patients, and often is the only overt sign of full-blown AIDS.

"The issue for Sequus," said UBS Securities analyst MarcOstro, "is whether anyone will use the drug off label. Themarket as indicated on the label clearly represents amodest market."

Another liposomal-based product _ NeXstar Pharma-ceuticals Inc.'s DaunoXome _ is awaiting final approvalfrom the FDA as a first-line therapy for Kaposi'ssarcoma. The Boulder, Colo., company got an approvableletter in July.

Ostro said NeXstar's product will have an advantagebecause of the first-line labeling, but said it is difficult toknow which is a better treatment until side-by-side testsare done. "It's going to be interesting to see how theDoxil-DaunoXome competition plays out," he said.

Sequus has completed a Phase III randomized trialcomparing Doxil to the standard three-drug ABV(adriamycin, bleomycin and vincristine) regimen for first-line Kaposi's sarcoma therapy. It showed Doxil was moreeffective in producing responses and had a morefavorable risk-to-benefit ratio than ABV. Hurwitz saidthose data will result in wide use of Doxil as a first-lineKaposi's sarcoma treatment.

Company officials said the Phase III results will bepresented Dec. 5, 1995, but they wouldn't say what theyintend to do with the new information. Clearly, however,the data could be used in future filing amendments withthe FDA. Also, Sequus is required to do a post-marketingefficacy study as a condition of the accelerated approvalthat was recommended for the drug last February.

Clinical results of Doxil for Kaposi's sarcoma showed thedrug reduced the pain, swelling and severity of lesions aswell as progression, said Joe Limber, Sequus' executivevice president in charge of sales and marketing.

"We have a sales force in place that immediately will bein contact with physicians, distributors and third-partypayers," Limber said, adding that pricing will be finalizedthis week.

Doxil is to be administered intravenously at 20 mg/m2over 30 minutes, once every three weeks, for as long aspatients respond and tolerate the therapy. Those gettingrefractory treatments have had a median treatment lengthof six months, or about eight cycles, said TonyGoosmann, Sequus' senior director of marketing.

Liposomal drug development has been slowed over theyears because of problems related mostly tomanufacturing. But the area is expected to be hot nextyear, Hurwitz said, with launches of these drugs andapprovals expected for other cancer drugs andformulations of amphotericin B for fungal infections.

Sequus raised nearly $50 million in a public offeringcompleted in October, giving it the resources to launchDoxil. The company said it is in discussions withpotential partners for marketing of Doxil, with a primaryfocus outside the U.S. European review of Doxil isexpected in February.

Sequus' stock (NASDAQ:SEQU) fell 25 cents Mondayto close at $13, but is up significantly from its 52-weeklow of $5.50. n

-- Jim Shrine

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