18 April 2005 00:01 [Source: ICB Americas]
Swiss biotech company Serono pared down its late-stage clinical pipeline by cutting two Phase III programs earlier this month. Although analysts expect the company to stand firm in the near term on the strength of its multiple sclerosis (MS) drug Rebif (recombinant beta interferon), Serono will need to address growth challenges beyond Rebif’s contribution.
Two separate independent Data Safety and Monitoring Boards (DSMBs) recommended the termination of Onercept (recombinant tumor necrosis factor binding protein) in moderate-to-severe psoriasis and Canvaxin in stage IV melanoma.
After beginning three Phase III clinical trials of Onercept just last year, Serono recently received reports of two cases of sepsis, one of which was fatal. “As a consequence of the Onercept unfavorable risk-benefit profile, the DSMB recommended discontinuation of its clinical development in moderate-to-severe psoriasis,” confirmed Paul Lammers, Serono’s chief medical officer.
In the case of the Canvaxin trial, the DSMBdetermined that data from the study did not demonstrate significant evidence of patient survival. “We should recognize that stage IV melanoma is truly an end-stage disease, with a difficult treatment and with a huge unmet medical need,” notes Lammers.
In addition to the trial in Stage IV melanoma, Serono is also conducting a Phase III clinical trial of Canvaxin in Stage III melanoma, which the company confirmed will continue. Interim data analysis is expected from this trial in the third quarter, with full data analysis expected around mid-2006. Serono is codeveloping Canvaxin with Carlsbad, Calif.-based CancerVax. The two companies signed a $37 million collaboration deal in December 2004.
Serono’s reduced pipeline now consists of Canvaxin in Stage III melanoma and Mylinax (oral cladribine) in MS. Though wary of the company’s decreased prospects in terms of late-stage clinical candidates, analysts specifythat the losses of Onercept in psoriasis and Canvaxin in Stage IV melanoma make a minimal impact on the company’s overall financials. “[We] have not had any sales for Canvaxin in our model, and the $30 million we have had for Onercept represents less than 1 percent of projected company sales by that time,” notes West LB analyst Daniel Wendorff. “Therefore we only need to make minor adjustments to our model from 2007 onwards.”
“We are removing SFr120 million [about $100 million] in estimated sales by 2010 from our model. Due to the high-risk nature, we did not have any forecasts for Canvaxin,” says UBS analyst Martin Wales. “As a reminder, Serono paid $37 million to CancerVax in the 2004 fourth quarter. Total milestone consideration would have been $253 million.”
The near-term benefit of Rebif is expected to buoy Serono’s position. The drug gained an advantage recently when Biogen Idec pulled its newest MS drug, Tysabri (natalizumab), off the market in late February owing to a link with a rare and fatal disease. Sales of Rebif have reportedly risen in the short period followingTysabri’s withdrawal, while sales of Avonex (interferon beta-1a), Biogen Idec’s other MS drug, reportedly declined in the same period. Other MS drugs currently on the market include Betaseron (interferon beta-1b) by Berlex Inc. and Copaxone (glatiramer acetate) by Teva Pharmaceutical Industries Ltd.
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