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| Overview
of the Market for Monoclonal Antibodies & Antibody
Therapeutics |
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Michael Wijaranakula
Staff Researcher, Infotix
Systems, Inc. - December 22, 2004
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Last month, Medarex announced a deal with Bristol-Myers to develop the Medarex drug MDX-010 for melanoma, a potentially deadly skin cancer, and against a range of other types of tumors. The drug is now in Phase III late-stage trials.
According to Reuters, under that deal, Donald Drakeman, Medarex's chief executive, said Medarex is entitled to keep 45 percent of profits from sales of the drug if it is approved. "We believe a new cancer product like MDX-010 could be a big blockbuster, with potential multibillion-dollar sales, because we have seen
promising preliminary results in a number of other tumor
types," Drakeman said. Drakeman said the company's
experimental drug against prostate cancer, called
MDX-070, "is another blockbuster opportunity," with potential annual sales of more than $1 billion. He said Medarex expects to report Phase II trial results of the drug next year.
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Non-traditional MAbs by “phage display” - Cambridge, UK-based Cambridge Antibody Technology (NASDAQ ADR: CATG) has proprietary methods for the engineering of bacteriophages (viruses that infect bacteria) to display human monoclonal antibodies on their surface which it uses in the design and development of antibody-based therapeutics, one of which is
Humira for Rheumatoid arthritis sold by Abbott Labs (NYSE: ABT). The two companies have been in dispute since last year over the royalties Abbott pays to Cambridge Antibody. Abbot had interpreted a royalties agreement to mean it should pay 2% of net sales, while Cambridge Antibody had claimed the deal meant it should receive 5% of net sales. This week, a U.K. High Court judge ruled in favor of Cambridge Antibody. Abbott said it will appeal the ruling but the appeal will not be heard until late January 2005. Investment
Opportunities in the Biotech-MAb Sector - MEDX is
one of the MAb sector's best performers this year with a
year-to-date return of over 65 percent, compared
to the 10 percent return of the AMEX Biotechnology
Index (AMEX:$BTK.X). With a promising pipeline of
Mederex's and
its partners' antibodies in clinical trials as well as a
stream of milestone payments and royalties from pharmaceutical and biotech firms,
we believe that Mederex's shares could again outperform the
AMEX BTK index next year. |
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Protein Design Labs is expected to narrow its
losses to between $52 million to $57 million next year due
in part to royalties from two potential blockbuster
drugs, Avastin from Genentech and Tysabri,
a
multiple sclerosis drug from Biogen Idec (NASDAQ: BIIB). According Biogen
Idec,
Tysabri could expand the current MS market to
$US 6 billion from $US 3.6 billion over time.
Tysabri is also currently in Phase III
clinical trials for bowel disorder Crohn’s disease, and
in Phase II for rheumatoid arthritis (RA). If the
clinical trials become successful, we believe that
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Tysabri could be a potential RA treatment with little or no serious heart-related effects, substituting
for drugs such as Vioxx, Celebrex and
Naproxen. PDLI shares, which performed in-line with the AMEX
BTK index this year, could rise substantially next year as
the Tysabri drug establishes
growing usage. According to their recent SEC filing, Abgenix's net losses
amounted to $102.2 million in the six months ending June 30, 2004.
In October 2003, AstraZeneca
entered a multi-year partnership with Abgenix for the
joint discovery and development of therapeutic antibodies for up to
36 cancer targets. As part of the partnership agreement, AstraZeneca
will make a $100
million investment in Abgenix convertible preferred stock, initially
convertible into Abgenix common stock at $30 per share. Upon the
achievement of certain milestones, Abgenix may also require
AstraZeneca to invest an additional $60 million in Abgenix
convertible preferred stock. This month, the company plans to sell $150 million worth of convertible senior notes due in 2011.
Wall Street analysts believe that biotech companies
such as Abgenix will become profitable, but not earlier than 2008.
This year, Abgenix's shares underperformed the
AMEX BTK Index by as much as 25% and currently have a "neutral" rating.
Share prices could very much depend upon the successful
development of ABX-EGF, a cancer drug in a market which is
presently dominated by ImClone System's ERBITUX. (NASDAQ:IMCL).
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About NMS
Research Analysis:
NMS Research Analysis is a private independent research entity of
Infotix Systems, since 1999, bridging the gap between cutting-edge
scientific research and the investment community. We offer in-depth
research analysis of companies and emerging technology in sectors
ranging from semiconductors, biotech, nanotechnology, novel
materials for aerospace and energy industries.
Mr. Wijaranakula's portfolio holds long positions
or controls in AMGN, JNJ, PDLI and MEDX.
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