Supply seen assuring Bristol arthritis drug sales
Mon May 8, 2006 4:02 PM ET

NEW YORK, May 8 (Reuters) - Bristol-Myers Squibb Co's recently launched arthritis drug Orencia is more likely to achieve its promise as a big seller, thanks to federal approval of a new manufacturer of the product, industry analysts said on Monday.

The New York-based drugmaker in December won U.S. approval for the treatment of rheumatoid arthritis, the less common but potentially crippling form of arthritis caused by an overactive immune system.

Although Bristol-Myers makes Orencia, which is given by periodic infusions, the company had cautioned that its factory in Syracuse, New York, would be unable by itself to meet potential demand for the new medicine.

Analysts said uncertainty about adequate supplies was allayed late on Friday after U.S. regulators approved use of Swiss specialty chemicals and biotechnology group Lonza to make batches of Orencia for Bristol.

As a result, Bear Stearns analyst John Boris said he now expects sales of Orencia to hit $900 million by 2010, up from his earlier projection of $750 million.

The drug was approved for treating patients that have failed to benefit from older treatments -- including Amgen Inc's Enbrel and Johnson & Johnson's Remicade, which both work by blocking a protein called tumor necrosis factor (TNF) linked to inflammation.

Boris said in an interview that even his raised Orencia sales forecast could prove "conservative" in view of how many patients are not getting adequate relief.

"You have 20 percent to 40 percent of patients with rheumatoid arthritis that actually don't benefit from TNF drugs, even when they are used with methotrexate," another widely used treatment, he said.

UBS Securities analyst Roopesh Patel on Monday said approval of Lonza as a supplier "removes an uncertainty," and should assure that Orencia achieves annual sales of $1.3 billion by 2010.

With the manufacturing issue resolved, Patel said Bristol-Myers will now increase its focus on also competing with Rituxan, a rheumatoid arthritis sold by Biogen Idec that is also used to treat patients that fail to benefit from anti-TNF drugs


Drug stocks closed mixed Wednesday while shares of Vertex Pharmaceuticals slid in the wake of a weakened first-quarter earnings report.
The Amex Pharmaceutical Index edged up 0.4% to close at 325.47 and the Amex Biotechnology Index fell 1.8% to 666.50.

Biotech index component Vertex slid 7% to $34.82. After market close Tuesday, the anti-viral drug developer reported a quarterly net loss of $50.1 million, or 47 cents a share. This compared to a net loss of $44.7 million, or 56 cents a share, last year.

Biogen Idec dipped as low as $42.52 before closing down marginally at $44.07.

Discovery Laboratories was on the rebound, after sinking over 50% on Tuesday on news that manufacturing problems were delaying approval of its pediatric respiratory treatment Surfaxin.
Shares of Discovery shot up 17% to close at $2.58.

Also climbing was German drugmaker Bayer AG up 3% at $43.70. The FDA awarded its drug candidate Nexavar orphan drug status in the treatment of liver cancer, meaning that if it receives approval, it will enjoy seven years of market exclusivity for that condition. Nexavar is already approved in the U.S. for the treatment of kidney cancer.
Gilead Sciences (GILD) fell 7% to close at $57.31. The HIV drug developer announced on Tuesday that it had closed on a $1.3 billion sale of convertible senior notes