Millennium's multiple myeloma agent Velcade is leading the parade of oncologic therapies attracting renewed enthusiasms from investors.

The approval of AstraZeneca's Iressa on May 5 is being hailed on Wall Street as a sign that the prospects for other late-stage oncology projects have improved.

After a longer and more difficult review than anticipated, AstraZeneca's lung cancer agent cleared FDA with labeling and postmarketing study commitments that appear to give the company ample opportunity to establish the product in the marketplace.

The NDA for Velcade was submitted Jan. 21 and is receiving a six-month priority review. The accelerated approval application is based on Phase II data in a highly refractory patient population (¹ Also see "Millennium Velcade Multiple Myeloma Launch Expected In Late 2003" - Pink Sheet, 13 January, 2003., p. 10).

The user fee deadline for Velcade is in mid-July; at the time of the NDA submission, the company was projecting a late 2003 launch.

In the wake of the Iressa approval, however, Wall Street is expecting a shorter timeline, with speculation focusing on approval ahead of the American Society for Clinical Oncology meeting at the end of May.

On the surface, Velcade and Iressa have little in common other than fitting in the broad oncology category. Iressa is an epidermal growth factor receptor blocker for use in refractory non-small cell lung cancer. Velcade is a proteasome inhibitor for refractory multiple myeloma.

However, from a regulatory standpoint, there are similarities: both applications are for accelerated approval based on uncontrolled Phase II trials using tumor response rate as a primary endpoint.

To the degree that the Iressa approval indicates that FDA will be very flexible in applying the accelerated approval standards, the sense of optimism about Velcade may be justified.

The agency, however, is downplaying the notion that the Iressa approval serves as a regulatory precedent (see ² Also see "Iressa Approval Upholds Standard For Oncology Subpart H Approvals – FDA" - Pink Sheet, 12 May, 2003.).

The optimism about Velcade also reflects some reading of the tea leaves regarding the FDA advisory committee schedule. The agency tentatively set aside dates in June for a meeting of its Oncologic Drugs Advisory Committee; with no meeting announced to date, investors are concluding that there are no issues with the Velcade application that the agency believes require input from the committee.

The enthusiasm for Velcade was evident in April, with Millennium shares gaining 39.9% during the month to close at $11.

The stock moved up another 13.2% to peak at $12.45 on May 5, before giving back some of the gains by the end of the week.

Millennium was one of the standout performers during a strong month for biotech stocks. The "F-D-C" Index of NASDAQ biopharmaceutical shares gained 9.3% in April. On the heels of a 6.1% gain in March, the biopharmaceutical component of the index is now up 21.3% in 2003 (see chart: " ³ Monthly 'F-D-C' Index of OTC Drug-Wholesaler Stocks ").

Other biotech firms with late-stage oncology projects also prospered.

OSI Pharmaceuticals, which is developing an agent in the same class as Iressa( Tarceva ), posted a 32% gain in April to close at $21.12. Given the likely competition between the two agents, the actual approval of Iressa was treated as bad news for OSI, with the stock trading down slightly on May 5.

Genentech, OSI's partner for Tarceva, also did well in April, gaining 8.5%.

Abgenix, which has an earlier-stage EGFR blocker in development, ABX-EGF, posted a 9.2% gain for the month, and has added another 10% in early May.

The strongest indication of the renewed enthusiasm for biotech oncology projects may be the performance of ImClone, whose travails with the EGFR monoclonal antibody Erbitux set the tone for a disastrous year for biotech stocks in 2002.

ImClone gained 10.5% in April to close at $18.28 as investors are steadily renewing their enthusiasm about the potential for Erbitux. The stock has moved up another 10% in May, and is now trading at more than double its February low of $9.

ImClone's performance also reflected an endorsement of the latest management change at the company.

CEO Harlan Waksal and Chairman Robert Goldhammer resigned from the top two positions at the company. Waksal will remain with ImClone as chief science officer. CFO Daniel Lynch is serving as acting CEO until a successor is named.

The Iressa approval was greeted by the business press as the latest indication of a fundamental shift at FDA under Commissioner McClellan.

Coupled with the April 24 approval of Genzyme's Fabrazyme for Fabry's disease, the story line in the business media is that FDA is becoming more accommodating to industry.

Genzyme gained 10.5% during April on the strength of the Fabrazyme (agalsidase beta) approval, followed at the end of the month by the approval of Aldurazyme (⁴ Also see "Genzyme Aldurazyme Patient Registry Will Evaluate AEs, Antibody Formation" - Pink Sheet, 5 May, 2003., p. 23).

The case appears stronger for arguing that the Fabrazyme approval reflects McClellan's impact on the agency.

The Iressa decision involved debate within the Center for Drug Evaluation & Research, but there do not appear to have been any issues that warranted the direct involvement of the commissioner.

However, the commissioner's office is talking about the Phase IV trial of Fabrazyme as a model for McClellan's innovative postmarketing surveillance programs.

Characterizing the approval of Fabrazyme as a sign that FDA is pro-business, however, is overly simplistic.

The approval of Fabrazyme ends any realistic chance for TKT to enter the market with its competing version of agalsidase alfa ( Replagal ) in the near term because of orphan exclusivity issues. TKT ended slightly on the positive side for the month (up 1.5%).

The Iressa decision is also not universally popular within industry.

Genta CEO Ray Warrell, MD, offered an unusually blunt opinion about the potential for approval of Iressa to have a negative impact on drug development during a recent investor conference (⁵ Also see "Iressa Approval Would Set Bad Precedent For Oncology, Genta CEO Tells BIO" - Pink Sheet, 10 March, 2003., p. 21).

Genta is developing the antisense oligonucleotide Genasense for multiple oncologic indications. The company is sharing in the Iressa-induced spike in biotech shares, gaining more than 10% in May after a decent showing in April (up 4.5%).

However, Genta's development plan - the company is conducting several Phase III studies funded by partner Aventis before filing the drug - may be one reason why the stock did not turn in a stronger performance during a time when the focus is on FDA's willingness to accept Phase II data.

The assumption that the approval of Iressa means fewer hurdles for other agents also overlooks another event of May 5: the announcement by GSK and Corixa that FDA is extending the user fee deadline for Bexxar by three months (see ⁶ Also see "GSK/Corixa Bexxar User Fee Deadline Extended To Review Safety Database" - Pink Sheet, 12 May, 2003.).

Corixa's share price slipped 1.7% on the news of the extended review, although it recovered in the subsequent days as the market digested the company's optimism about the prospects for approval on the new deadline. Corixa was up 5.3% in April.

For Millennium, a near-term approval for Velcade could actually be awkward for the company.

Millennium is seeking a partner for the drug. The intent appears to be to trade some of the return from the initial indication in multiple myeloma for funding to develop other indications. While a faster than expected approval would enhance Millennium's leverage in licensing negotiations, the company would still presumably want to complete an agreement prior to launch.

Iressa To The Rescue: Oncology Stocks Stand Out On Wall Street

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