� 1999, Biotechclinician
BioChem Pharma UPDATES
BioChem Pharma learned that Triangle Pharmaceuticals and Abbott Laboratories have entered into an alliance for the development and marketing of six antiviral products, including FTC and DAPD. BCHE has intellectual property rights to both FTC and DAPD in the U.S. and elsewhere. The statement about intellectual property rights came about after Abbott said it will invest $335 million in Triangle Pharmaceuticals to market six antiviral drugs. Under the terms of the agreement, Abbott and Triangle will co-promote four Triangle drugs currently in development for HIV and hepatitis B, and Abbott Lab's two protease inhibitors. Under the agreement Abbott will provide non-contingent research funding of $31.7 million, up to $185 million of contingent development milestone payments and the sharing of future commercialization costs. Abbott will also purchase approximately 6.57 million shares of Triangle's Common Stock at $18 per share. The partnership will allow the companies to launch at least one new antiviral drug each year over the next four years. Abbott will get three nucleoside reverse transcriptase inhibitors and one non-nucleoside reverse transcriptase inhibitor. One of the drugs is Coviracil (emtricitabine, formerly known as FTC) a nucleoside reverse transcriptase inhibitor, is in Phase III clinical trials for the treatment of HIV and in Phase I/II for HBV. An NDA for Coviracil for the treatment of HIV is to be filed in 2000 with a European filing expected in 2001. DAPD is also a nucleoside reverse transcriptase inhibitor. It is in Phase I/II for the treatment of HIV. BioChem Pharma stated they hold granted patents relating to FTC and DAPD, including composition of matter patents and several additional patents and patent applications in the U.S. and throughout the world. BCHE's DAPD European grant was recently upheld by the European Patent Office at an oral hearing in an opposition proceeding against the patent brought by Emory University, Triangle's licensor. According to Dr. Francesco Bellini, Chief Executive Officer, BioChem Pharma Inc., "BioChem's intellectual property rights covering FTC and DAPD form a part of the Company's substantial antiviral patent portfolio and reflect the Company's ongoing competitive efforts in the antiviral field. The Company has been successfully asserting its antiviral patent portfolio throughout the world and has every intention to continue to vigorously defend and enforce its patent rights."
This is certainly interesting news for BioChem and its shareholders. It looks from here as if half of the agreement Abbott has with Triangle may be going to BCHE (two of the four drugs Triangle is contributing to the partnership belong to BCHE). It certainly seems like that could be a significant amount of money ($167.5 million to BioChem). This also gives BCHE ownership of future competitors to its main revenue source for the next few years. This will certainly be worth keeping an eye on as it plays out.
BioChem Pharma launched Zeffix (lamivudine) in South Korea. The local approval for marketing permit was granted in South Korea earlier in May and the product will be supplied to hospitals beginning in June. The approval in South Korea is quite important to the role out of Zeffix around the world. There is high disease prevalence in South Korea as well as the rest of Southeast Asia. A good, easy to administer therapy for Hepatitis B will be a boon to patient care in this country. Hepatitis B affects 350 million people and is the ninth leading cause of death worldwide. Zeffix is currently available in the Philippines, Hong Kong, Canada, United States and Switzerland. Zeffix is approved in China, Thailand, Pakistan, New Zealand, Argentina and Australia. The European Union's Committee for Proprietary Medicinal Products recently gave a positive opinion to the European Medicines Evaluation Agency for marketing approval of Zeffix. Regulatory applications to market Zeffix for chronic hepatitis B treatment have been submitted worldwide, including in Taiwan and Japan. This drug continues to have massive potential. It seems to work well, is well tolerated and easily dosed. With continuing approvals around the world, Zeffix's sales should continue to ramp for the foreseeable future.
BioChem Pharma is in partnership with Vertex Pharmaceuticals (NASDAQ: VRTX) for the development and marketing of Incel (biricodar dicitrate) in Canada. Vertex announced results of a Phase II clinical trial of Incel in combination with doxorubicin for treatment of soft tissue sarcoma refractory to chemotherapy. The trial evaluated the safety, tolerability and efficacy of Incel administered intravenously in combination with doxorubicin in patients with progressive, inoperable, advanced or metastatic soft tissue sarcoma. The results suggest that Incel helped restore tumor sensitivity to chemotherapy in some patients who failed previous doxorubicin treatment. All 25 evaluable patients had doxorubicin-resistant disease, either progressive disease after failing prior treatment with doxorubicin, or a disease type considered to be unresponsive. Ten of the patients had gastrointestinal stromal sarcomas, a subtype of soft tissue sarcoma that is almost never responsive to doxorubicin therapy. Of the other 15, 60% demonstrated overall clinical benefit, with two patients showing partial responses and seven patients showing stable disease after treatment with Incel and doxorubicin. In one of the seven patients with stable disease and in one patient with a partial response, treatment with Incel and doxorubicin decreased tumor mass sufficiently to allow surgical resection for curative intent. A partial response (50% or more tumor regression) was observed in two patients, who had progressed while on prior treatment with doxorubicin achieving 70-86% measurable tumor shrinkage. One of the responses has lasted for one year and the other was sufficient to allow surgical resection of the residual tumor. Stable disease (defined as less than 50% tumor regression or no evidence of progression for greater than or equal to 6 weeks) was observed in eight patients. Before enrollment in this study, these eight patients had exhibited either new lesions (two patients) or an increase in measurable tumor mass of 23 to 141% within eight weeks of study entry. One patient with stable disease was stabilized sufficiently to have had the tumor mass surgically resected. The study also showed the response with GI stromal sarcomas differs from other sarcomas and do not show a good response to this treatment. There are 7,000 new cases of soft tissue sarcoma, malignant tumors of the connective tissue diagnosed in the United States and Canada annually. Seventy percent of patients fail to respond to initial doxorubicin therapy, and relapse following initial response is frequent. There are currently Phase II studies investigating Incel in combination with chemotherapy for the treatment of ovarian, prostate and small cell lung cancers. A Phase II study of the activity of Incel in patients with relapsing breast cancer has completed enrollment, and data analysis is underway. There are two drug pumps that remove chemotherapy commonly found in tumor cells. These are P-glycoprotein (P-gp) and multidrug resistance-associated protein (MRP). Incel enhances the accumulation of chemotherapy agents in tumor cells by blocking both P-gp and MRP thus restoring the sensitivity of tumor cells to treatment with chemotherapeutic agents. These trials expand BioChem's cancer pipeline in Canada. The more drugs a company can market in a given specialty, the more opportunity to leverage their sales force. Though BioChem is not an "exciting" company, they seem to go about their business in a smart way. Wall Street will see the value of this company eventually.
BioChem Pharma announced that Zeffix/Epivir-HBV sales were $800,000 during the first quarter. This number fell substantially below analyst expectations of $11 million. The stock obviously suffered this shortfall. Despite these results, BioChem executives reiterated on the conference call with investors that they expect Zeffix sales this year to total between $100-150 million U.S. Francesco Bellini, BioChem's CEO called Zeffix "a breakthrough therapy" and insisted that "despite its slow start in the U.S., this product will soon benefit millions of people worldwide." The company did meet EPS expectations with $0.18 per share. This product continues to be the best treatment for a disease that infects 350 million people worldwide. The belief that this drug will continue to sell poorly highlights the shortsightedness that many analysts on Wall Street show.
The company also announced that after a "strategic review," they have decided to "concentrate on the research, development and commercialization of vaccines and therapeutics with a focus in cancer and infectious diseases. In due course, it plans to withdraw from diagnostics." Beginning this quarter, the consolidated financial results will include the diagnostics operations on a discontinued accounting basis instead of a consolidated basis. Jacques R. Lapointe, President and COO, stated, "While we have decided to focus our corporate resources on the more profitable and rapidly growing therapeutics and vaccines businesses, the diagnostics operations will receive, pending new investors, the full marketing, sales and administrative support of the Company." This is probably a wise move given the fact that the unit has been losing money.
BCHE also announced their new HIV treatment, dOTC (BCH-10652), which is presently in Phase II trials, is expected to advance to pivotal Phase II/III combination therapy trials this fall. They also plan to file an IND application to begin Phase I trials on its recombinant meningitis protein vaccine later this year.
BioChem Pharma announced that the European Union's Committee for Proprietary Medicinal Products (CPMP) has given a positive opinion on Zeffix, recommending its approval in the European Union. The CPMP has recommended the approval of Zeffix for a broad group of chronic hepatitis B patients. The recommendation requests Glaxo Wellcome to continue to supply the Agency with additional data on specific patient sub-groups over the coming years. The CPMP's opinion will now be considered by the European Commission, who will make a final decision. There are an estimated 4 million people infected with Hepatitis B in the European Union.
BioChem Pharma announced that the Opposition Division of the European Patent Office dismissed Emory University's opposition to BioChem's granted European patent covering composition of matter and a process for preparing 3TC (lamivudine). This decision occurs in line with the European Patent Office's decision dismissing a similar Emory University opposition to another of BioChem's patents covering a wide range of nucleoside analogues. These decisions by the European Patent Office are certainly welcome news. The likelihood that Emory University would win these disputes was not high but, if they had, it would have been a severe blow to the company.
BioChem Pharma's hepatitis B drug Zeffix (lamivudine) was shown to significantly decrease the risk of progression to cirrhosis in studies recently presented to the European Association for the Study of the Liver in Naples. In studies comparing Zeffix to interferon-alpha and placebo, Zeffix was shown to have a smaller proportion of patients progress to cirrhosis (1.8%), when compared to placebo-treated patients (7.1%), or patients treated with interferon-alpha (9.5%). These studies looked at the rate of liver cirrhosis over one year. These results should serve to speed the approval and use of the drug in the number of countries where this disease runs rampant. I suspect it will not take long to see the favorable economics of treating this disease rather than take care of a patient with a chronic illness.
BioChem Pharma has started Phase II clinical trials of the anticancer drug troxacitabine (BCH-4556). The Phase II trial will evaluate the safety and efficacy of troxacitabine in the treatment of solid tumors (pancreas, prostate, breast, ovarian, colorectal, renal, non-small cell lung cancers, melanoma) and leukemia. Troxacitabine is a dioxolane nucleoside analogue anticancer agent, the first of this class. It is a complete DNA chain terminator and DNA polymerase inhibitor which incorporates itself into the growing DNA chain of cancer cells, interfering with replication. Phase I results will be presented at the upcoming American Society of Clinical Oncology (ASCO) annual meeting to be held in Atlanta, Georgia from May 15-19, 1999. CliniChem Development, which was formed by BioChem in 1998, is having BioChem conduct the clinical trials. BioChem has the option to license troxacitabine and has an option to purchase all of the CliniChem Class A common shares at a price set according to a predetermined formula at any time between now and March 31, 2003. I am interested in the results of the Phase I trials. A strong cancer drug in the pipeline would expand the appeal to Wall Street signicantly. One of the big complaints about BioChem has been the paucity of a pipeline. I do continue to believe using some of the rich cash flow generated by lamivudine to buy a late trial product would be a good idea.
BioChem Pharma Inc. (NASDAQ: BCHE; ME, TSE: BCH) announced that Glaxo Wellcome (BCHE's partner), has received regulatory approval in China for lamivudine for the treatment of chronic hepatitis B. Lamivudine was granted a Class 1 drug certificate in China, which offers the advantage of manufacturing exclusivity for the product in the treatment of hepatitis B for a period of eight years. China still must grant an Import Drug Permit as well as pricing approval. The companies hope to obtain these in 1999. GlaxoWellcome has begun the construction of manufacturing facilities at Suzhou, in the Jiangsu province, near Shanghai. They are planning a range of products, including lamivudine. These new facilities will be operational by the year 2001 at a cost of 85 million pounds sterling. Hepatitis B is one of the most common infectious diseases in the world and the ninth most common cause of death worldwide. Approximately 350 million people around the world are long-term carriers of the virus. 30% of this group will develop progressive liver disease. 75% of the Hepatitis B virus carriers live in Asia and the Western Pacific, with China having the highest incidence of the disease in the world. Under their agreement, BioChem will receive royalties from Glaxo on sales of lamivudine. Glaxo has the right to develop, manufacture and sell lamivudine worldwide, except in Canada, where BioChem and Glaxo have formed a commercialization partnership.
SmithKline Beecham will participate in the development, manufacturing and marketing of a nasally delivered influenza vaccine with BioChem Pharma, Inc. (Nasdaq: BCHE; ME, TSE: BCH) and Biovector Therapeutics. BioChem Pharma's agreement with SithKline covers influenza technologies including cell-derived injectable and nasal delivery vaccine technologies. BioChem licensed the nasal delivery technology from Biovector Therapeutics in May 1997. SmithKline Beecham Biologicals will be in charge of worldwide manufacturing except for Canada, marketing for Europe and the rest of the world. SmithKline will contribute upfront and milestone payments to BioChem Pharma beginning in 1998. Under the terms of the agreement, after a period of joint development funded by both parties, BioChem and SB will collaborate to market the products in the United States, while in Europe and the rest of the world, SB will be exclusively responsible for marketing. In addition SB will be responsible for manufacturing for markets throughout the world except Canada. BioChem will benefit from the sales of the vaccines in the US and the rest of the world, excluding Canada, in accordance with a pre-determined formula. In Canada, BioChem Pharma will retain all exclusive rights to the vaccines, including production and marketing.
This agreement involves a technology known as the Light-Biovector system. This synthetic system has the same muco-adhesion properties as the virus and ideally serves as a carrier for the antigens. This allows for an efficient nasal administration. The first Phase I study conducted by BioChem Pharma in Canada involved 60 healthy adult volunteers and showed immune responses both at the systemic (IgG) and mucosal (IgA) levels. The new antigen from cell-culture based manufacturing processes was developed by BioChem Pharma and will be used in the co-development program. BioChem's proprietary cell culture-based manufacturing process is being developed to replace the classical egg-based manufacturing process and shows promise in its ability to yield an immunologically equivalent or better vaccine profile. In addition, BCHE's new cell culture-based technology may allow shorter production lead-times than with egg culture, allowing a quicker increase in output in response to an influenza outbreak. Nasal vaccines could make a significant contribution to overcoming the barrier that annual injection poses to wide acceptance of vaccination. In addition, a nasally administered flu vaccine has the potential to create a local immunological barrier and thus, better protection to influenza infection.
The influenza market is large. Influenza is a major cause of illness and death, striking an 70-150 million people and causing more than 125,000 deaths in North America and Europe each year. The best and most cost-effective protection against influenza is annual vaccination.
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� 1999, Biotechclinician