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Schering, Idec See Delay for Zevalin

July 02, 2002|From Bloomberg News

BERLIN — Schering and U.S. biotechnology partner Idec Pharmaceuticals Corp. said Monday that the European introduction of their cancer treatment Zevalin will be delayed by about a year because of manufacturing glitches.

The news sent shares of San Diego-based Idec down $2.85, or 8%, to $32.60 on Nasdaq. Schering's American depositary receipts fell $2.70 to $60.80 on the New York Stock Exchange.

An outside company employed by Idec that assembles the kits required for administering Zevalin needs to change procedures to meet guidelines from the EMEA, the European Union regulator, said Schering spokesman Oliver Renner. Schering expects no effect on sales and earnings this year, he added.

The German company still expects Zevalin, a radiotherapy treatment for non-Hodgkin's lymphoma, to generate sales of $49.7 million three years after introduction, Renner said.

Idec has the rights to sell the treatment in the U.S. The drug may have peak sales of $100 million by 2007, Lehman Bros. analysts estimate.

Schering had planned to bring Zevalin to market in the next six months after the Food and Drug Administration approved Zevalin for marketing in February.

Zevalin wasn't expected to contribute to Idec's 2002 European sales, and it will represent less than 1 cent a share of the company's 2003 profit, said Eric Ende, a Merrill Lynch analyst who has a "buy" rating on Idec shares and said he doesn't hold them.

"It's a psychological negative," Ende said.

Idec, which last year posted net income of $102 million on sales of $273 million, said that it might give more information in a conference call July 17.

"The clinical efficacy of Zevalin is not in question," said Joachim-Friedrich Kapp, head of the German company's specialized therapeutics area. "We are confident we'll be able to launch Zevalin during the second half of 2003."

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