12
BioTech Stock Report, March 2003
obesity drugs and a more aggressive
stance toward treating obesity. This
view is in line with recent data pub-
lished by the Centers for Disease Con-
trol and the American Medical Asso-
ciation about the growing epidemic of
obesity and diabetes in the US. The
Fast Track designation could also al-
low the company to seek one of sev-
eral expedited regulatory pathways
such as priority review or rolling NDA.
Regeneron plans to conduct a
separate Phase III trial in the severely
obese patient population, of those that
have failed currently marketed drug
therapies. The trial, scheduled to begin
this spring, will likely last one year, per
FDA guidelines.
More importantly, we are awaiting
more clarity on the drug from the
Phase III Axokine data for obesity.
That may happen around the begin-
ning of April, not in the first quarter as
stated in our last report. Also, it is an-
ticipated the release of Phase II data
for the IL-1 Trap on rheumatoid arthri-
tis in mid-2003.
Undoubtedly, Regeneron's shares
are going to be volatile as investors
attempt to handicap the outcomes of
the Phase III trial Axokine results. A
positive outcome could drive signifi-
cant share appreciation, but a failed
trial will cause shares to slide. Al-
though there is limited available infor-
mation on which outcome to antici-
pate, we are cautiously optimistic of a
positive outcome when one-year data
are released.
In early February, Sepracor/
NASDAQ: SEPR (BSR #17: Asthma)
filed the NDA with the FDA for Estorra
in insomnia in elderly patients. Once
the FDA accepted the application, in-
vestors will focus on an approval letter
from the FDA that could happen
within 10 months, around mid-
December. At the same time, manage-
ment anticipates profitability sometime
during 2004. Management would like
drugs going forward may include their
potential impact on survival, their
safety profile, convenience of admini-
stration, and reimbursement possibili-
ties.
Thalomid sales will continue to
grow, but would be greater if the drug
had FDA marketing approval for multi-
ple myeloma rather than just for ery-
thema nodosum leprosum (ENL), an
inflammatory complication of leprosy.
Thus it is an incentive for Celgene to
make considerable progress in its clini-
cal programs. In the last quarter, the
company has initiated five of the six
planned Phase III trials of Thalomid
and Revimid that include multiple my e-
loma, melanoma and kidney cancer.
The data will be used to support a la-
bel expansion for Thalomid in other
diseases. Without the label indication,
the only acceptable promotional activi-
ties for Thalomid outside of ENL are
scientific presentations in medical con-
ferences and publications in peer-
reviewed medical journals.
We are maintaining our buy rating
despite the major near-term potential
risks to Millennium's stock such as the
setback in the regulatory review of
Velcade, continued fear from Wall
Street that Integrilin's sales growth will
be disappointing, and growing inves-
tor concern over the balance sheet due
to the convertible debt from the COR
acquisition, and high cash burn rate.
Even with a third quarter 2003 Velcade
launch, Millennium will continue to
post a loss in 2004 and 2005 with the
possibility of breakeven by 2006.
Regeneron/NASDAQ: REGN
(BSR #70: Chronic Diseases) recently
received Fast Track designation for
Axokine for the treatment of severely
obese patients who have failed cur-
rently marketed drug therapies, such
as Meridia and Xenical. The Fast Track
decision has positive implications for
Axokine as it may indicate a softening
of the FDA's conservatism toward
NOTE: BioPortfolio is not a model portfo-
lio. It is a list of companies that lead in their
application. Companies on this list are se-
lected only for their technology leadership,
without consideration of their current share
price or the appropriate timing of an invest-
ment decision. The presence of a company
on the list is not a recommendation to buy
shares at the current price. Reference Price
is the company's closing price on the Refer-
ence Date, the day the company was added
to the table, typically the last trading day of
the month prior to publication.
to meet its target, especially since Es-
torra, assuming it receives FDA ap-
proval must have a good launch since
Pfizer/Neurocrine will not be far behind
with Indiplon.
The new clinical data for Estorra is
in the elderly population, over a 2 week
time period for 231 patient that demo n-
strated clinically and statistically sig-
nificant reductions in sleep onset com-
pared to placebo. Total sleep time was
significantly increased and wake time
after sleep onset was notably de-
creased, while quality of sleep and
depth of sleep were drastically im-
proved. In addition, next day benefits
were demonstrated by improvements
in alertness, sense of physical well
being, reduction in morning sleepi-
ness, and ability to function. Manage-
ment indicated that this is the first time
that next day benefits have been dem-
onstrated for the elderly population.
Sepracor plans to present detailed
clinical data from its Phase III clinical
program at the American Psychiatric
Association (APA) meeting in May
and Associated Professional Sleep
Societies (APSS) meeting in June. $$
