ImmunoGen’s Setback May Signal Delays for Onyx Drug

ImmunoGen Inc. (IMGN)’s failure to win an accelerated U.S. review for its cancer drug sent shares down the most in eight years, and may signal delays for biotechnology companies led by Onyx Pharmaceuticals Inc., analysts say.

ImmunoGen shares plunged $3.23, or 39 percent, to $5.16 at 4 p.m. New York time in Nasdaq Stock Market composite trading after the Food and Drug Administration rejected a request from the company’s partner, Swiss drugmaker Roche Holding AG (ROG), to consider clearing the breast-cancer drug trastuzumab-DM1 based on results from mid-stage human trials.

The FDA has reconsidered fast-track approval from three marketed medicines in as many months, suggesting drugmakers may have a harder time getting new treatments cleared until longer, larger human tests are completed, said Jason Kantor, an analyst at RBC Capital Markets. Onyx and Seattle Genetics Inc. have said they will seek drug approvals from early results and may be the next companies delayed by regulators.

Today’s announcement “signals a harder line stance from the FDA against accelerated approval and approvals based on small patient numbers,” Kantor said in a telephone interview. “It’s a symptom of something that’s been going on for a while at the FDA, and it highlights the importance of defining the patient population ahead of time.”

Accelerated approval was authorized in 1992 to help spur development of medicines for HIV. The program allows companies to win conditional marketing clearance of drugs for serious illnesses based on preliminary evidence showing they work. It has been popular for makers of cancer drugs because tumor shrinkage or other physical signs that cancer is being defeated can be measured more quickly than prolonged survival.

Phase Two Results

Onyx plans to file an application for accelerated approval of its experimental tumor treatment carfilzomib this year, based on data from the second of three rounds of testing usually required by regulators, Chief Operating Officer Laure Brege said in a conference with investors on Aug. 10. In the study of 266 people with the blood cancer multiple myeloma, the drug lowered the blood concentration of a protein produced by cancer cells in 36 percent of patients.

“Today’s news about trastuzumab-DM1 does not change our plans,” Onyx spokeswoman Lori Murray said today in an e-mail. “We continue to believe there is a clear unmet medical need for patients with relapsed and refractory multiple myeloma.”

Seattle Genetics

Seattle Genetics Inc. (SGEN) said in a July 27 conference call with investors that it intends to apply for accelerated approval in the first half of next year for its experimental treatment for Hodgkin lymphoma. The Bothell, Washington-based company is testing its product, brentuximab vedotin, in 100 patients in collaboration with Takeda Pharmaceutical Co. (4502), of Osaka, Japan.

The shares of Onyx rose 33 cents, or 1.3 percent, to $25.18 in Nasdaq trading. Seattle Genetics increased 35 cents, or 3 percent, to $12.

The targeted antibody brentuximab, also known as SGN-35, homes in on the CD30 protein that is the marker of a Hodgkin lymphoma cell, where it unloads a cell-killing toxin. The drug uses a method similar to that employed by ImmunoGen’s treatment, known as T-DM1.

Seattle Genetics faces less approval risk than its competitors because the FDA preapproved its phase-two study design in what’s known as a special protocol assessment, Kantor said.

‘Treatment Landscape’

“We do not believe the FDA’s decision on T-DM1 has implications for Seattle Genetics,” Eric Dobmeier, a company spokesman, said in an e-mail. “In our view, the decision appears to relate to the treatment landscape for metastatic breast cancer, rather than more generally applicable principles.”

T-DM1 is an “armed antibody” that fuses Roche’s Herceptin breast-tumor medicine with a potent cancer-killing chemotherapy developed by Waltham, Massachusetts-based ImmunoGen. Herceptin acts as the guidance system, delivering the drug directly to its target.

A study last year found that T-DM1 reduced tumors in one-third of critically ill patients. Roche filed for approval of its breast-cancer drug in July using results from this trial, the second of three stages of testing usually required. The FDA denied the request, saying patients in the study had not exhausted all treatment options, Roche said in its statement.

‘By the Book’

“It seems to indicate that the FDA is playing by the book, that it’s really enforcing the regulatory standard by trying to hold accelerated approval up to the standard,” Howard Liang, an analyst with Leerink Swann & Co. in New York, said today in a telephone interview. “It’s not going to cut slack for a drug just because it’s active.”

Roche, based in Basel, Switzerland, said today that the companies expect to submit an updated application for the breast-cancer drug in mid-2012.

Companies that receive accelerated approval are required to conduct additional tests after their products are on the market to prove that they work and are safe.

Pfizer Inc. said June 21 that it would withdraw its blood cancer drug Mylotarg after 10 years on the market because studies found it didn’t work and was tied to deaths from liver and lung complications. Mylotarg was the first drug with accelerated approval to be pulled from the market, the FDA said.

Roche’s Avastin

An advisory panel recommended July 20 that the FDA rescind Roche’s accelerated approval for Avastin in breast cancer after follow-up tests failed to prove the drug slowed progression of the disease. The agency’s decision, scheduled to come by Sept. 17, may cost Roche $1 billion in annual sales, according to Sanford C. Bernstein & Co. analyst Tim Anderson.

Shire Plc (SHP) said Aug. 17 that it will stop selling the blood-pressure drug ProAmatine at the end of September because studies haven’t been completed to show the treatment works. The medicine was cleared in 1996 through the accelerated approval program.

“It’s going to take a while to know if there’s some real climate trend that should cause us to be more concerned,” Ira Loss, an analyst at Washington Analysis who has followed the FDA for more than three decades, said today in a telephone interview.

The agency is “absolutely not” backtracking on the concept of accelerated approval, Loss said. “Each of these circumstances has its own characteristics and it’s not a sign of abandonment of this approach,” he said.

To contact the reporters on this story: Ellen Gibson in New York at egibson9@bloomberg.net; Catherine Larkin in Washington at clarkin4@bloomberg.net.

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.