Idec to Reap Huge Benefits With Drug’s Approval

Idec to Reap Huge Benefits With Drug’s Approval

Biotech: Zevalin Expected To Earn Hundreds of Millions in Sales For Local Company

BY MARION WEBB



Senior Staff Writer

Analysts reacted enthusiastically to the regulatory approval of Idec Pharmaceuticals Corp.’s non-Hodgkin’s lymphoma drug Zevalin, the first radioimmunotherapy to hit the marketplace.






San Diego-based Idec announced Feb. 19 it won approval from the Food and Drug Administration to sell Zevalin.






Idec shares gained 10.9 percent following the news closing at $62.10 on Feb. 20.






Salomon Smith Barney analyst Elise Wang reacted Feb. 20 by raising her rating on Idec to “buy” from “outperform,” citing earlier than expected approval of the drug.






FDA officials delayed the approval earlier this year asking Idec to provide more information on manufacturing and safety.






UBS Warburg analyst Geoffrey Harris said the approval is very positive for Idec.






The FDA clearance gives Idec a competitive edge on Corixa Corp., which developed a similar drug called Bexxar with GlaxoSmithKline Plc.






The Seattle-based biotechnology firm also had a series of setbacks in trying to win approval from the FDA.






Zevalin’s approval gives Idec a first-mover advantage to the marketplace, Harris said.






William Rastetter, Idec’s chairman and CEO, was excited over the drug’s approval.






“It feels very good,” Rastetter said. “We have our first product that we have (taken) 100 percent ourselves from the discovery to the marketplace.”






Idec owns all product rights in the United States.






Zevalin was approved by the FDA for use in combination with its best-selling non-Hodgkin’s lymphoma drug, Rituxan.






Rituxan garners about $820 million in annual sales. Idec needs to share revenues for Rituxan with its marketing partner Genentech.






Big Projections






Analysts, however, say that while Zevalin sales will be lower, investors can still bank on the drug reaping hundreds of millions of dollars in sales.






Harris projects at least $40 million in Zevalin sales for this year, which could rise to an estimated $82 million in 2003 and $134 million in 2004.






He gave a 2002 earnings per share estimate of $.89 cents for Idec. For 2003, he expects earnings per share to climb to $1.10.






Zevalin was approved in combination with Rituxan when patients don’t respond to Rituxan alone or conventional therapy.






Dr. Auayporn Nademanee, a hematologist and oncologist with the City of Hope National Medical Center in Los Angeles, said she was looking forward to Zevalin’s approval.






“This is very exciting,” Nademanee said. “This treatment is very promising because it is not as toxic as certain chemotherapies the idea is to directly target the treatment to the disease and reduce the complications to the normal cells.”






Nademanee said she has evaluated some 30 non-Hodgkin’s lymphoma patients receiving Zevalin over the last three to four years at the medical center and found 60 percent of all patients who failed to respond to Rituxan benefited from Zevalin treatments.






Treatment is complicated.






“First you give a Rituxan infusion, then you take a whole-body scan to localize the lymphoma areas in the body When Zevalin is infused, it binds to the lymphoma cells and radiates or kills them.”






Several specialists need to observe the process, including a nuclear physicist to calculate the dose of radiation and a radiation oncologist to provide treatment.






Many Patients






Idec said it is estimated some 300,000 people live with the disease in the United States.






Rastetter estimated about 75,000 patients could benefit from Zevalin therapy.






Last year, 55,000 people out of a target population of 150,000 were treated with Rituxan, he added.






Annual costs for Rituxan therapy runs about $15,000 per person, Rastetter said. He expects costs will be “modestly higher” for Zevalin.






Private insurers will cover Zevalin treatments, but federal reimbursement for Medicare patients will take months, he said.






In Europe, Germany-based drug company Schering AG holds the marketing rights for Zevalin. Rastetter hopes European regulators will clear Zevalin for marketing this year.






The marketing potential for Zevalin in the European countries is equivalent to the United States, Harris and Rastetter agreed.






Harris also said that Idec’s stock price is undervalued. His 12-month price target for Idec’s stock is $85.