transgene attack on lung cancer

Transgene Attack on Lung Cancer May Yield $1.6 Billion Tumor-Fighting Drug
by on February 26, 2010

By Andrea Gerlin Feb. 26 (Bloomberg) Investors are counting on Transgene SA to attract a drugmaker to help fund development and promote what may become the first product to attack lung cancer by stimulating patients immune systems. Transgene, whose biggest shareholder is the French family headed by Alain Merieux , needs a partner to meet the $30 million to $50 million cost of final tests on the TG4010 vaccine, said Gary Waanders , a London analyst at Nomura Code Securities Ltd., citing his estimate for the price of a 1,000-patient trial. The chances Transgene will attract a drugmaker rose Dec. 1 when U.S. regulators granted TG4010 fast-track status, meaning a shortened review for a product that may be better than available treatments. TG4010 helped prolong the median survival time by about six months for people with normal levels of a type of immune cell known as natural killer cells, Transgene said in February 2009. Twice as many patients responded to treatment with TG4010 as with chemotherapy alone, the company said . Its two times better than what we have today, than other products for non-small cell lung cancer, said Arnaud Guerin , an analyst at Portzamparc Societe de Bourse SA in Nantes. Transgene rose 5 cents, or 0.2 percent, to 20.50 euros in Paris trading yesterday. The shares, bolstered by the U.S. Food and Drug Administration recommendation and the prospect of a licensing deal, have climbed 17 percent since Dec. 1. Waanders is the only one of six analysts in a Bloomberg survey who doesnt recommend buying the stock. Possible Announcement The company is close to selling rights on TG4010, said Pierre Corby , an analyst at Aurel BGC in Paris, in a Feb. 16 interview. Pfizer Inc. , Roche AG, Novartis AG and Sanofi-Aventis SA are potential partners, Corby said. Corby said he was told by Transgene Chief Executive Officer Philippe Archinard and another company official in January that terms of a deal had been set. Transgene, based near Strasbourg, France, said in a Dec. 1 statement that it hoped to reach a collaborative agreement around the end of last year. The companys financial chief, Philippe Poncet , said in 2008 that Roche, Novartis and Sanofi may be interested in TG4010. Transgene executives havent commented publicly this year on their search for a drugmaking partner. Archinard and Poncet declined to comment for this article, Elisabetta Castelli, a spokeswoman, said on Feb. 23. She cited the possibility of a news announcement in early March as the reason. Sales Forecast Nina Schwab-Hautzinger , a spokeswoman for Basel, Switzerland-based Roche, declined to comment. So did Eric Althoff , a spokesman for Basel-based Novartis. Geoffroy Bessaud , a spokesman for Sanofi-Aventis in Paris, and Ray Kerins , a spokesman for Pfizer in New York, also had no comment. Peak sales may reach 1.15 billion euros ($1.6 billion) in 2018 if TG4010 makes it to the market, possibly as early as 2015, said Aurels Corby. The analyst recommended buying Transgene in December 2008, when the market price was 12.10 euros, according to data compiled by Bloomberg. His price target was 16 euros, later raised to 22.50 euros and most recently to 26 euros, a level set after the FDA granted fast-track status to TG4010. If the medicine is cleared for other types of cancer, annual sales may reach $3 billion, said Guerin of Portzamparc Societe de Bourse, assuming a treatment price of 10,000 euros. Transgene currently has no marketed products. TG4010 is designed to spur the immune system to fight malignancies. Enlisting the help of a large drugmaker may help Transgene reach the market before GlaxoSmithKline Plc and Merck KGaA , which are also developing lung cancer vaccines, Corby said. Survival Benefit Data released in February 2009 from a mid-stage study of 148 patients indicated that TG4010 combined with chemotherapy extended survival of advanced non-small cell lung-cancer patients with normal levels of natural killer cells by 17 months, compared with 11 months for chemotherapy alone. The data they showed from this trial was a dream, so it makes sense to pursue it, said Robert Dreicer, chairman of solid-tumor oncology at the Cleveland Clinic in Ohio, in a Feb. 4 interview. Dreicer, a member of Transgenes scientific advisory board, led a mid-stage trial of TG4010 for prostate cancer. Christoph Rochlitz, an oncologist at University Hospital Basel, in Switzerland, said he doubts the survival benefit. Very frequently, the inclusion criteria for Phase II studies lead to a seemingly better survival compared to Phase III trials, Rochlitz said in a Feb. 2 e-mail. Phase III is the last of three sets of trials ordinarily required for regulatory approval. Well Tolerated Rochlitz was involved in a Phase I trial of TG4010. That research, published in August 2003, found the medicine was generally well tolerated in patients with metastatic tumors. Lung cancer kills about 1.3 million people each year, more than any other malignancy, according to the Geneva-based World Health Organization. About 85 percent of patients die within five years of diagnosis. Unlike immunizations that prevent disease from taking hold, so-called therapeutic cancer vaccines are aimed at helping the body to fight disease once it occurs. The only such product on the market is Vitespen, which was approved in Russia for kidney cancer last year after being rebuffed in the U.S., according to Cornelia Thomas , an analyst for WestLB AG in London. Vitespen is made by Antigenics Inc., a biotechnology company based in Lexington, Massachusetts. Promising Data More vaccines may be coming down the track. Twelve of the 50 cancer therapies in late-stage clinical trials as of 2008 were therapeutic vaccines, according IMS Health Inc., a research company in Norwalk, Connecticut. The Phase III data which is coming forward from a number of trials looks promising, said Karen Anderson, an oncologist at the Dana Farber Cancer Institutes Cancer Vaccines Center, in Boston, in a Feb. 4 interview. The actual benefit remains to be proven. Anderson has no ties to Transgene. Glaxo, of London, began the final trials of its MAGE-A3 vaccine for lung cancer in 2007 and for melanoma in 2009. Family-controlled Merck KGaA based in Darmstadt, Germany, and not affiliated to Merck & Co. of Whitehouse Station, New Jersey began final tests of its Stimuvax vaccine in lung cancer in 2007 and in breast cancer last year. The lung cancer studies may take four to five years to complete. The biggest investor in Transgene is Institut Merieux , the Lyon, France-based holding company for Alain Merieux and his family. Forbes magazine last year estimated Merieuxs fortune at $2.4 billion, ranking him 285th among the worlds richest people. The institute owns 55 percent of Transgene as well as 59 percent of BioMerieux SA, a publicly traded diagnostics company based in Marcy LEtoile, France. Natural Killers Transgene plans to enroll 1,000 patients with normal levels of natural killer, or NK, cells in TG4010s final test. People with that cell type survived longer in mid-stage tests than those without it. About 75 percent of the population has normal levels of NK cells, a type of white blood cell. Glaxo is enrolling patients with early or moderately advanced lung cancer. Merck KGaA is focusing on patients with more advanced levels of the disease, while Transgene is targeting those with the gravest prognoses. Transgene had 72.9 million euros of cash as of Sept. 30. It expects to use 25 million to 30 million euros a year this year and next. Corby estimated a partnership may bring in as much as 400 million euros. Transgene also has a 218 million-euro agreement with Roche, the worlds biggest maker of cancer treatments, for the development of TG4001, an experimental vaccine to treat precancerous lesions that might lead to cervical cancer.