BUSINESS
Immunex Prepares To Launch Its First Drug Product beta, a related protein. The two firms also agreed to exchange royalties. InImmunex at a glance terleukins are immune system horFounded: July 1981, stock publicly mones, or cytokines, that control im: traded since July 1983 mune cell growth and function. From its four-year-old joint venHeadquarters: Seattle ture, Immunology Ventures, with Revenues 1989: $28.2 million, up Eastman Kodak subsidiary Sterling 27% from 1988 Drug, Immunex acquired worldwide Ann M. Thayer, manufacturing and marketing rights Net loss 1989: $14.3 million to IL-1 and IL-4 receptors, which C&EN Northeast News Bureau R&D expenses 1989: $18.9 million bind these interleukins, and to three protease inhibitor projects. Sterling When Immunex opened its doors in Employees: About 350 traded them for worldwide rights to 1981, the focus of the fledgling bioBusiness: Biotechnology firm focusing two protease inhibitors, one rational technology company was on immui on discovery, development, manufacdrug design product, and about $5 nological therapeutics. Now, nine million in cash. years later, with its focus intact and | ture, and marketing of immunological a meeting with the Food & Drug | therapeutic drug products. Product deImmunex then took non-U.S. Administration for review of its first j velopment portfolio includes granulorights to the two receptors, along cyte-macrophage colony stimulating product scheduled for late last week, with IL-7, IL-8, and tumor necrosis the Seattle-based firm appears to be | factors, cytokines (interleukins), and cyfactor receptors, and swapped them tokine receptors. nearing its long-term goal. That with partner Behringwerke, part of goal, common among biotechnology | Subsidiaries: Immunex Research & DeHoechst, for U.S. rights to IL-3, hopefuls, is to become a fully inte- | velopment Corp. focuses on research granulocyte macrophage colony grated pharmaceutical company. i through clinical trials; Immunex Manustimulating factor (GM-CSF), and facturing Corp. oversees production, other CSFs. Immunex will comarket Becoming such a company—one regulatory issues, and product manageCSFs in the U.S. with Behringthat discovers, develops, manufacwerke's U.S. affiliate, Hoechst-Roustures, and markets biopharmaceuti- j ment. sel Pharmaceuticals. The result was cals—might occur about five years Immunex's reacquiring the desired sooner than once expected. An aggressive corporate strategy devel- ex was faced with whether royalty near-term products for the North oped in late 1987 and early 1988, and manufacturing income alone American oncology market. and put into effect in 1989, has leap- could support research, allow the Several factors made such steps frogged the company to where it company to compete, and provide possible, including a strong balance hoped to be in the mid-1990s. As shareholder value. sheet and the leverage of a successchairman of the strategic planning Immunex "was taking its best and ful drug development portfolio. committee, and recently named Im- brightest researchers and putting Strategic alliances had provided Immunex president, Michael L. Kranda them on other people's products," munex with the incentive and has been at the forefront during says Kranda. "Looking forward, it means to set up a product developwhat he describes as probably the was decided that what should be ment infrastructure that could conmost dramatic time in the com- done is increase the company's pro- duct clinical trials, handle regulatopany's history. prietary product portfolio." To ac- ry issues, and do pilot-scale manuIn 1988, Immunex found itself in complish this, Immunex completed facturing. Yet, in less than six the position of having licensed away what it likes to call its "triple play." months, the company was facing the The first step in September 1989 new challenge of moving from primarketing rights to the majority of its potential products. Although this was reacquiring U.S. marketing marily R&D to sales and marketing. "Immunex spent 1990 at a frantic was a realistic strategy early in the rights to interleukin-1 (IL-1) alpha company's history to raise funds to from Syntex. In return, Syntex re- pace," says Kranda, "consolidating support research, explains Kranda, it tained non-U.S. rights to IL-1 alpha and preparing to realize the potenwas not aa "long-term was not lone-term play/' olav. ImmunImmun- and most worldwide rights to IL-1 tial gain from product sales, which
Company that started in '81 gets ready to move from R&D to manufacture and marketing of immunological therapeutics, five years ahead of schedule
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December 17, 1990 C&EN
obviously is the most important outstanding goal." During that time, as president and chief operating officer of Immunex's manufacturing subsidiary, Kranda oversaw an inspection of the company's small-scale production plant, the startup of a marketing and sales force recruited from established drug companies, and plans for construction of a $30 million production facility to begin in 1991. A successful stock offering in October raised $37 million. With GM-CSF already in clinical trials since 1987, Immunex prepared and filed its first product license application (PLA) in February 1990. GM-CSF, which promotes the production of white blood cells, is expected to be a major biotechnology drug. Having been under a program for expedited review, Immunex appeared before an FDA advisory committee in August. Although the committee did not recommend approval for GM-CSF, Immunex's experience with FDA has been viewed favorably by observers. In September, FDA allowed Immunex to make GM-CSF available free of charge to critically ill patients under a treatment investigational new drug program. "It would have been extraordinary to have been approved," says Kranda. The committee had questions regarding historical control group data in studies on GM-CSF in treating bone marrow transplant failure. "The level of questions, and the fact that [the company] has been able to respond in such a way that FDA deemed it appropriate to put us back on the next agenda, [has left] Immunex very satisfied with the way things turned out." Kranda adds that almost double the patient population has now been evaluated, along with an added, placebo-controlled, double-blind study on promoting early engraftment in bone marrow transplants. The transition from R&D to manufacturing and marketing can be a difficult period for a biotechnology company, particularly when in limbo awaiting an FDA decision. The rapid rate of corporate development in the past 18 months has made Immunex "very much aware of [what it means] to be in transition and the dynamics of it," says Kranda. In addition, the company now has taken
on more of the risk of drug development. In the future, Immunex will not rule out alliances with other companies, he adds. "The difference is that in any strategic alliance, Immunex will be a fuller player." For now, Immunex is comfortable with its situation based on what Kranda calls a smooth-running R&D engine and exciting commercial prospects. One of the clearest signs of transition is the loss of $14.3 million reported on revenues of $28.2 million in 1989. Revenues in 1989 were up nearly 27% over the previous year, but the company saw its first profit, $657,300, in 1988. For the first three quarters of 1990, Immunex posted a loss of $3.1 million. R&D expenses, which include the costs of clinical trials, and expenses in preparing for the launch of GM-CSF have jumped significantly. Immunex has about $40 million in cash and securities. According to analysts, GM-CSF is expected to bring the company about $50 million in sales in its first year. Immunex sales will depend, of course, on when competitors reach the market. Amgen appeared before FDA with G-CSF, a related product with treatment indications similar to GM-CSF. Genetics Institute and its licensee Sandoz have filed a PLA with FDA for GM-CSF. A patent interference has been called between patent applications filed by Immunex and Genetics Institute.
Kranda: a most dramatic time
"Even prior to issuance of the interference, Immunex's position has been that it would have freedom to operate in this market," says Kranda. "The declaration of the patent interference supports this position." However, no patents have yet been awarded on GM-CSF. It is expected to take a few years to resolve the issue of first inventor of GM-CSF. In the meantime, products are expected to come to market, very possibly led by Immunex, as early as this spring. Other products on the horizon include IL-2, licensed to Hoffmann LaRoche and cross-licensed with Cetus, from which Immunex receives royalties. IL-2 has not yet been approved in the U.S., although Cetus has been trying (C&EN, Aug. 27, page 5) and Roche has its product in clinical trials for renal cell cancer. Of more direct importance to the firm are IL-1 alpha, in Phase I trials as a bone marrow protectant, and IL1 beta, nearing the end of Phase II trials as a wound healing agent. IL-4 with Sterling, for cancer therapy, and IL-3 with Hoechst-Roussel, for neutropenia and platelet deficiencies, are also in clinical trials. Immunex expects to begin clinical trials for IL-1 receptor for rheumatoid arthritis in 1991. Tumor necrosis factor receptor for treating cachexia and septic shock is expected to be the company's second receptor product in clinical trials, says Kranda, with IL-4 receptor being targeted later for allergy and asthma indications. A hot area of development involves the use of CSFs and other cytokines in combination. Immunex may be well positioned to take advantage of this, with developments in both areas. Immunex recently reported the genetic engineering of a GM-CSF/IL-3 fusion molecule providing therapeutic effects of both platelet and white blood cell stimulants. Such molecules are expected to be easier to evaluate in clinical studies and to administer, and possibly to be more effective. Immunex expects to enter clinical trials next year. However, in September, Genetics Institute was awarded a patent covering IL-3 proteins produced using all or part of the IL-3 DNA sequence and showing IL-3like properties. D December 17, 1990 C&EN
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