Immunex Corp. said Thursday that it expects to regainexclusive U.S. marketing rights to its first approved drug,Leukine, resolving in the process a cross fire of lawsuits withits co-marketing partners.
Immunex of Seattle agreed to pay undisclosed, but significantlyhigher, royalties on its U.S. sales of Leukine, a granulocytemacrophage colony stimulating factor (GM-CSF), toBehringwerke AG, an affiliate of Hoechst AG, both of Germany.In return, Hoechst-Roussel Pharmaceuticals Inc., Hoechst's U.S.subsidiary in Somerville, N.J., agreed to halt its U.S. sales ofProkine, the trade name for its GM-CSF product that it helpedtake through U.S. clinical trials.
Immunex has reported total U.S. Leukine sales of $39 million inthe 16 months following FDA approval in early March 1991 ofGM-CSF for increasing white blood cell production in connectionwith certain cancer treatments. Although Hoechst-Roussel'sProkine sales were never publicly disclosed, some marketanalysts have placed them at one-half or less of Immunex'sLeukine sales.
All of the companies agreed to dismiss the pending lawsuits,resolving one of the thorniest co-marketing disputes yet toerupt over a biotechnology product. Immunex last winteraccused Hoechst-Roussel of, among other things, enticingImmunex's Leukine customers by distributing at least 10,000sample vials of Prokine. Immunex sued Behringwerke and itsU.S. affiliate last April in a Washington state court, seeking aninjunction and accusing the co-marketers of breach of contractand unfair competition.
Behringwerke and Hoechst-Roussel countersued Immunex inJune, asking a U.S. District Court in Wilmington, Del., forinjunctive relief. No injunction was granted in either case andneither has been scheduled for trial.
Hoechst-Roussel's agreement to depart the U.S. market for GM-CSF is subject to review on antitrust grounds by the FederalTrade Commission.
Thursday's agreement also provides that:
-- Behringwerke would continue to be supplied with bulk GM-CSF from Immunex to support its overseas sales, includingEurope, where GM-CSF is pending regulatory review.
-- Immunex would acquire from Behringwerke for anundisclosed sum exclusive marketing rights to GM-CSF in Japan.
-- Immunex would purchase for $2 million commercial rightsoutside North America to tumor necrosis factor receptor(TNFR), which Immunex is developing as a potential treatmentof septic shock
-- Immunex also regains all commercial rights to Pixy321, itscombined GM-CSF/interleukin-3 fusion protein, which isconsidered a second-generation GM-CSF product.
"This agreement gives us complete control over TNF receptorworldwide," said Jason Rubin, Immunex's vice president ofcommunications. "It ensures Immunex and Bristol-MyersSquibb (which entered a product-rights exchange withImmunex last January) exclusivity over development ofPixy321 worldwide."
Investors apparently saw the agreement as good news forImmunex, whose stock (NASDAQ:IMNX) rose $1.75 a share toclose at $34.75 on Thursday.
While it appears to brighten Immunex's long-term outlook, theagreement would set back the company's operating resultsbetween $8 million and $10 million during the second half of1992, Immunex officials said.
Rubin said that estimate takes into account about $3 million inlost manufacturing revenues from anticipated bulk sales ofGM-CSF to Hoechst-Roussel; a $3 million milestone payment,which Immunex has waived; a $2 million payment for rights toTNF-receptor; and possibly $2 million to buy back productinventory from Hoechst-Roussel.
However, Immunex is expected to earn even more from GM-CSF as it converts Hoechst-Roussel's Prokine customers to itsown Leukine, Merrill Lynch analyst Stuart Weisbrod saidThursday. He also expects overall unit sales will increase as theproduct is brought under a single label. "It will allow Immunexto market against Amgen (which makes a more successful rival,Neupogen) instead of competing against Amgen and Hoechst-Roussel."
Weisbrod expects that Leukine could receive FDA approvalnext year as a treatment for neutropenia.
However, he expects that Immunex will funnel any increasedearnings from Leukine into stepped-up product development."Leukine is helping to fund a very aggressive clinical researchprogram," that includes trials of IL-1 receptor, TNF receptorand Pixy 321, Weisbrod said.
"I think they have one of the two best pipelines inbiotechnology right now," Weisbrod said. Chiron Corp. sharesthose honors, he said.
IMMUNEX REPORTS $3.4 MILLION LOSS
Immunex Corp. (NASDAQ:IMNX) reported a $3.4 million loss, or23 cents a share, for the second quarter ended June 30,compared with a $504,000 profit for the year-ago period.Revenues rose 7 percent to $17.1 million. Product sales wereup 60 percent to $13.5 million during the quarter, helped byLeukine, with $6.5 million.
-- Ray Potter Senior Editor
(c) 1997 American Health Consultants. All rights reserved.