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Executive Summary

CENTOCOR PLANNING TO SPIN OFF IMAGING PRODUCTS business -- its monoclonal antibody-based Myoscint, Capiscint and Fibriscint -- Chairman Emeritus and founder Michael Wall told investors Dec. 3 at a Robertson Stephens Medical Conference in New York City. "I am very optimistic that we will find homes for those products and that's what we using the sources to which we have access in the pharmaceutical industry," Wall said. "I don't think imaging of the sort we've been doing -- cancer imaging or even cardiovascular imaging -- has near the [same] potential as diagnostics even, or certainly therapeutics," Wall said. Johnson & Johnson's Ortho Biotech division holds the U.S. marketing rights to Myoscint (imciromab) and Capiscint. Centocor has been talking with J&J "about how we can work with them to find perhaps even other channels" of marketing, Wall noted, saying: "I believe myself that those imaging products must be sold by somebody in the imaging business." Centocor will "continue to seek approval" for the imaging products, he said. Wall heads a management team assembled in April to redirect the company. To date, none of the three agents have received FDA approval. Myoscint, a cardiac imaging agent, has had a PLA pending for the imaging of myocardial necrosis in acute ischemic heart disease since March 31, 1988. The first MAb-based imaging agent to undergo FDA advisory committee review, the agent received an approval recommendation in November 1991 ("The Pink Sheet" Dec. 2, 1991, p. 3). Centocor filed an NDA for Fibriscint for deep vein thrombosis in December 1991. Capiscint has been in Phase II trials as an injectable radiolabeled MAb-based imaging agent for atherosclerotic plaque. There have been indications that data concerns similar to those that arose with Centocor's Centoxin (HA-1A) may have been delaying Myoscint at FDA. Centocor engaged the law firm King & Spalding this summer to audit all its PLAs ("The Pink Sheet" June 29, In Brief). PLAs for two other MAb-based imaging products -- Cytogen's OncoScint-ovarian and OncoScint-colorectal, filed March 1990 and September 1989, respectively -- also have been pending at the FDA following an advisory committee approval recommendation in January ("The Pink Sheet" Jan 20, p. 3). Cytogen said at Robertson Stephens that FDA has raised no "substantive questions" about the applications and that it does not know why the products have not yet received approval. The planned spinoff of the imaging agents is one example of the scaled down, more cautious approach that Centocor has been taking since its April "crisis," as Wall called the Centoxin fall- out. "The purpose of our cutback exercise and reduction in force is to put ourselves in a position where the vagaries of the FDA or any other outside agent wouldn't throw us into the den of poverty," he said. Since the management restructuring, announced in April ("The Pink Sheet" May 4, T&G-11), the number of employees has been reduced from an April count of over 1,600 to about half that number, not including "a couple of hundred sales-associated people," Wall said. He said that a corporate partner has hired some Centocor ex-employees. The company is also reducing its burn rate, from $50 mil. in first quarter 1992 to the "mid-forties" in the second and the "mid-thirties" in the third quarter, Wall reported. Centocor's goal is to have a $25 mil. burn rate in first quarter 1993, a zero burn rate in first quarter 1994 and be in the black in 1994. In addition, the company is predicting its diagnostics business, which Wall estimated as having $50 mil. sales annually, will grow by 15% to 20%. per year. Another problem around April of 1992 was that "we weren't getting anywhere in Europe selling Centoxin," Wall added. Centoxin sales have had "modest increases" this year and sales are expected to grow as Lilly takes over the marketing of the drug. Lilly purchased marketing rights to Centoxin in a $125 mil. deal announced in July ("The Pink Sheet" July 20, T&G-6). Wall said that Centocor "would not have done the deal if we had not been able to get something in the neighborhood of 50% of the end sales." Although Centocor at this point doesn't have a gram-negative or endotoxin test to determine quickly what patients should take Centoxin, a test will not "ultimately be the critical item holding back the sales of Centoxin," Wall asserted. Instead, he said, Lilly feels that "the problem is educating the physician...if you can get to the physician and explain to them how to use the product, the sales will rapidly follow." The progress of Centoxin and Centocor's other lead product, CentoRx, currently in Phase III trials, is "on schedule," Wall said. The trial for the MAb platelet aggregation inhibitor CentoRx is in its final stages; work is completed with 2,100 patients but paperwork remains, he said. Wall said FDA has been "very user friendly to Centocor recently" and has been "heavily involved" in the CentoRx trial design, "so if the data is very good, will move through the approval process rapidly." The Phase II data for the anti-TNF monoclonal antibody CenTFN as a sepsis treatment is still being analyzed, and the company has not yet generated sufficient data on the product to support "going ...right into Phase III trials," the Centocor founder said. However, "the TNF looking better in a couple of applications than" the data for Centocor's IgG MAb Centara, he added. Centocor is hoping to begin a "large" trial of CenTNF by third quarter 1993 for an as-yet-undetermined "application which is very different from sepsis," Wall said.

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