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News on Psoriasis Drug Buoys Biotech

Pharmaceuticals: Panel's recommendation that FDA approve Biogen's Amevive sparks a stock rally in the sector.

May 24, 2002|DENISE GELLENE | TIMES STAFF WRITER

An advisory panel Thursday recommended Food and Drug Administration approval of Biogen Inc.'s psoriasis drug, triggering a long-awaited rally in biotechnology stocks.

The expert committee voted 8-2 in support of Amevive as a treatment for moderate to severe psoriasis. The FDA isn't required to follow the panel's advice, but it usually does.

The drug is important to Cambridge, Mass.-based Biogen, whose sales have been driven by its multiple sclerosis drug Avonex. But analysts expect Avonex sales to slow with the recent launch of Serono's Rebif. Rebif won FDA approval after Serono presented data showing its drug was superior to Avonex, which is expected to have sales of $1.1 billion this year.

Amevive would be the first biotechnology drug for psoriasis, an inflammatory skin disease that has no cure. As first to market, Biogen would have an advantage over what is expected to become a crowded field in the next multibillion-dollar disease category.

An estimated 1 million Americans have moderate to severe psoriasis, which currently is treated with ultraviolet radiation; methotrexate, a chemotherapy drug; or cyclosporine, an immunosuppressant. The drugs have serious side effects, and radiation increases the risk of skin cancer.

Genentech Inc. and Immunex Corp., which is being acquired by Amgen Inc., are expected to file marketing applications with the FDA next year. Immunex is testing its rheumatoid arthritis drug Enbrel on psoriasis. Genentech is developing a new drug called Xanelim with partner Xoma Ltd.

The Biogen psoriasis drug works by targeting T-cells, specific immune system cells involved in inflammation. An article published in the New England Journal of Medicine in July showed that 42% to 63% of patients showed improvement 12 weeks after taking the drug. The article reported that 26 patients had disease remissions that lasted 185 to 533 days after treatment.

The FDA, in a report prepared for the panel, raised questions about the long-term safety of a drug that suppresses the immune system. But the agency also noted that there was no evidence that the lower T-cell counts were associated with serious infection. Investors in search of good news about biotech stocks seized on the panel's recommendation and drove the closely watched Amex biotechnology index up 7.4%. The Nasdaq biotechnology index climbed 6.3%. Trading in Biogen shares was halted.

The sector had been hurt by a series of setbacks, such as the FDA's decision to reject an application for ImClone Systems Inc.'s cancer drug Erbitux. At the same time, investors have not reacted to good news in the sector, said Jim McCamant, editor of the Medical Technology Stock Letter in Berkeley. The market barely reacted when San Diego-based Idec Pharmaceuticals Corp. received approval to market the first-ever radioactive antibody this year. And it ignored positive results presented at the American Society of Clinical Oncology meeting that ended this week, he said.

McCamant cautiously predicted that the Biogen news would fuel a continued surge in biotech stocks.

The sector "is finally gaining momentum on the upside," he said. "It is likely to trigger a rally, but it is hard to have confidence because of how bizarre the market has been this year."

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