ImClone's Cancer Drug Is Back, and U.S. Approval Is Expected

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ImClone's Cancer Drug Is Back, and U.S. Approval Is Expected

By Andrew Pollack, the New York Times

February 11, 2004

The last time ImClone Systems was poised for a decision by drug regulators on Erbitux, its breakthrough cancer drug, it is fair to say that things did not go as planned.

Late in 2001, the Food and Drug Administration rejected the company's research. Its chief executive, Samuel D. Waksal, tipped family members to sell their shares before the company announced the bad news. As all the world knows, his friend Martha Stewart sold her shares, too.

Now, with Ms. Stewart on trial and Dr. Waksal in prison, Erbitux's time appears to have come. With better clinical trial data in hand, most analysts expect the F.D.A. to approve it by the end of the week, the deadline for the agency to act.

Doctors say that Erbitux will be an important therapy, initially for patients with colorectal cancer who have run out of options. Anticipating the F.D.A.'s action, investors have bid ImClone up to over $41, far above the stock's low of $6.11 in the fall of 2002. But that is well under the more than $70 it sold for in December 2001 when it last looked as if the drug would be approved. It is also below the $58.43 that Ms. Stewart sold her shares at.

That is because the frenzy surrounding the drug has ebbed from a few years ago, when Erbitux was portrayed as a biotechnology miracle and ImClone was besieged by thousands of desperate cancer patients. Since then it has become clearer that Erbitux and other biotech drugs like it, while they might substantially help a small percentage of patients, are far from cures.

Patients "were misled to believe it was a miracle drug," said Priscilla Savary, executive director of Colorectal Cancer Network, a patient group. "There are no miracle drugs out there. The population is responding a little more reasonably this time."

The commercial prospects for Erbitux also appear to have dimmed a bit, because other drugs have been approved or have neared approval since ImClone's stumble. While analysts say that Erbitux sales eventually could exceed $1 billion a year, much of its thunder has been stolen by Avastin, a colorectal cancer drug from Genentech that analysts expect to be approved by the end of March - and possibly as soon as Erbitux.

In December 2001, ImClone executives were assuring investors that Erbitux was on its way to approval. But at the end of that month, the F.D.A. refused to even review ImClone's application, saying the company's clinical trials were poorly designed and shoddily conducted.

Given past missteps by ImClone and its marketing partner, Bristol-Myers Squibb, there is still some speculation among investors that approval will be delayed.

An executive at one company said a potential snag had been that Erbitux produced at ImClone's factory in Branchburg , N.J. , was slightly different from the product used in the main clinical trial, which was made by a contract manufacturer.

This person said that the F.D.A. was expected to approve the drug made by the contract manufacturer. Bristol-Myers and ImClone have a four-month stockpile they can sell while applying for approval of the drug from ImClone's factory. Supply should not be disrupted, the executive said.

Asked by an analyst during Bristol-Myers's recent earnings conference call whether manufacturing would have an impact on approval, James B. D. Palmer, the company's chief scientific officer, replied, "Obviously we hope we will be going to approval," but, he added, it's "always unwise" to try to predict such things.

The F.D.A. does not comment on drugs it is reviewing. ImClone also declined to comment. Mindful of the trouble it has gotten into in the past, the company has canceled presentations at three investor conferences since the start of the year.

Both Erbitux and Avastin are monoclonal antibodies, proteins engineered to home in on molecules that cancer cells need to grow. While not free of side effects, these drugs are generally considered more tolerable than conventional chemotherapy, but the drug makers are seeking approval for their use with chemotherapy, not as replacements for it.

The drugs are aimed at colorectal cancer that has spread beyond the colon. Nearly 70,000 such cases a year are diagnosed in the United States .

Analysts expect Avastin to be the bigger seller, because adding it to existing chemotherapy drugs lengthened the median survival in a clinical trial by about five months. Erbitux has only been shown to shrink tumors, which can, but does not always, translate into longer life. Moreover, Avastin will be approved as an initial therapy; Erbitux is expected to be approved as a last-ditch treatment for patients who have not responded to chemotherapy.

A Ryan Beck & Company analyst, Cory Kasimov, said he expected Erbitux sales to reach $1.2 billion in the United States in five years, versus more than $2 billion for Avastin.

Doctors say both Erbitux and Avastin will be widely used, perhaps in combination, and that their arrival heralds a new era in treatment of colorectal cancer.

Dr. Heinz-Josef Lenz, an expert in colorectal cancer at the University of Southern California , noted that a decade ago there was only one drug for metastatic colorectal cancer, 5-FU. Now, with the pending approvals of Erbitux and Avastin, “the biggest challenge for physicians is to decide when to use what drug.”

With only 5-FU, patients could expect to live about 12 months after being diagnosed, Dr. Lenz said. The approvals over the last eight years of Pfizer's Camptosar and Sanofi-Synthélabo's Eloxatin, both conventional drugs, have lengthened that to about 18 to 20 months. Adding Avastin and Erbitux should extend life yet again by several months, he said.

But since the drugs are expected to be used in combinations, the cost of treating patients could soar. Erbitux and Avastin are expected to cost at least as much as Eloxatin, which costs about $2,400 every two weeks.

Adding to the cost burden is that Avastin and Erbitux are expected to help only a minority of patients. But with no way yet to predict which patients will benefit, many may be treated needlessly.

"We have to decide as a society whether there might be certain situations in which these drugs might not be best utilized," said Dr. Mace L. Rothenberg, an oncologist at Vanderbilt University .

Verdicts of various kinds have already been delivered on many of the people associated with Erbitux.

Dr. Waksal's brother, Harlan W. Waksal, who was ImClone's chief operating officer and then chief executive, resigned under pressure last year. The company's former general counsel also quit, as did much of its board, including Dr. John Mendelsohn, the president of the M. D. Anderson Cancer Center in Houston and the co-inventor of Erbitux. Many executives associated with Bristol-Myers's $2 billion purchase of marketing rights to Erbitux, a deal signed three months before the F.D.A. rejection, are also gone.

The F.D.A. itself has come under criticism from patient groups and a Congressional committee for its handling of Erbitux. The F.D.A. unit that reviewed it has been merged into a bigger division, and the agency has instituted new procedures for informing the Securities and Exchange Commission when it thinks a company is misleading investors about a drug's status.

Meanwhile, approvals of some other cancer drugs have come quickly in the wake of complaints that people might have died waiting for Erbitux.

ImClone's initial application was based on a trial that showed that Erbitux, when combined with irinotecan, the drug in Camptosar, shrank tumors by at least half in 22.5 percent of patients who failed to respond to irinotecan alone. The F.D.A. said it could not distinguish between the effects of Erbitux and irinotecan.

Subsequently, a bigger trial by Merck of Germany, which has the European rights to Erbitux, got nearly identical results.