Genentech Xolair Brand Awareness Reaches 55% Among Allergists

Brand awareness of Genentech's asthma drug Xolair (omalizumab) is over 50% among allergists as a result of Genentech's market preparation efforts, compared to 48% in the first quarter, Chief Operating Officer Myrtle Potter reported during an analyst meeting in New York City Feb. 21.

Awareness among other groups of specialists is also increasing, the company indicated. Xolair is recognized by 24% of pulmonologists, up from 18% in the first quarter, and by 13% of pediatricians, compared to 6% earlier in the year. Fourth quarter data should "improve substantially," Potter said.

Xolair brand recognition has been boosted by a "fairly extensive campaign...to drive disease awareness and disease education" in preparation for launch later this year, Potter told analysts.

"We're trying to make sure that patients...and physicians understand that there are new treatment options coming," the exec said. The message is "that while the currently marketed therapies might have provided some benefit, new therapies added to, or on top of, their currently used drugs will benefit them."

In preparing the market for Xolair, Genentech is calling on 18,000 high-prescribing allergists, pulmonologists, and select primary care physicians and pediatricians.

"One of the first steps in market preparation is making the deliberate decision to call on some physicians and not call on other physicians," she said. "We have done some very sophisticated presentation work...that has identified exactly where we want to focus our time."

A journal ad has run since August at a level that reaches 95% of targeted physicians, Potter added. "The journal ad speaks to the multiple factors that come into play in the allergic cascade."

Genentech also has a "fairly extensive effort underway to establish the distribution channels and prepare them to carry Xolair," Potter continued. "We have a lot of experience in making sure that patients receive reimbursement for their products" and that "they get on therapy as quickly as possible."

Genentech is waiting to hear from FDA on whether Xolair will be discussed at the Pulmonary-Allergy Drugs Advisory Committee meeting scheduled for April 26-27. The firm is optimistic it will receive a summer approval and launch Xolair by fall (¹ (Also see "Genentech Xolair May Get FDA Advisory Committee Review In April" - Pink Sheet, 22 Jan, 2001.)).

Two additional Phase IIIb studies for Xolair are underway. ALTO is a 24-week platelet monitoring safety study in 900 refractory patients ages six to 75 with difficult-to-treat asthma.

With ALTO, "we're looking to assure ourselves that Xolair with therapies that are used commonly in practice in a less rigorous setting than in our Phase III trials...remains safe," Chief Medical Officer Susan Hellmann, MD, said.

TENOR is a 300-site observational study of 5,000 patients ages six and older with difficult-to-treat asthma. "Basically a patient registry," TENOR will examine the "impact of the healthcare system of these patients and...their quality of life," Hellmann said.

Xolair's next milestone, FDA's preapproval inspection of Genentech's Vacaville, Calif. manufacturing facility, may be trickier than usual given the company's Dec. 14 warning letter citing good manufacturing practices violations at its South San Francisco site (² (Also see "Genentech Reorganizing Facility Following FDA Inspection And Warning Letter" - Pink Sheet, 1 Jan, 2001.)).

Genentech, however, is optimistic the inspection will go smoothly. "I think we're in a very good position now to ensure that we'll keep our compliance status and [keep] in good stead with FDA, given all the measures we've taken to assure that we meet FDA inspection expectations," Hellmann said. The Vacaville plant is already cleared to manufacture Rituxan.

Genentech reported that FDA is satisfied with its response to the warning letter. "On Feb. 7, we received notification from FDA that they found our early January responses to their warning letter to be acceptable," Hellmann said. FDA had cited Activase, Herceptin and Pulmozyme manufacturing processes.

A third Genentech production facility - in Porrino, Spain - is currently undergoing "reconstruction" and is being readied for FDA inspection, Hellmann said. Genentech acquired the plant from Glaxo Wellcome when the company ceased production of Wellferon.

Even with the divestiture, GlaxoSmithKline said it still has sufficient capacity to manufacture biotech products; the company is considering an acquisition in the biotech field (³ (Also see "GlaxoSmithKline Is Mouthful But Still Hungry: Is Next Course Japanese?" - Pink Sheet, 26 Feb, 2001.)).

Genentech maintains it does not face the capacity issues that have been plaguing the biotech industry. "There's been a lot of talk about...the capacity situation for biotech in terms of manufacturing," Hellmann noted. "The bottom line is, we're in a really great position to be able to serve our pipeline."

"We planned out our manufacturing capacity knowing that we have an extremely good pipeline, and we also have looked at the likelihood of success of the pipeline, again, planning for many things to work, but not everything to work," Hellmann maintained.

During a press conference following the analysts meeting, Genentech CEO Arthur Levinson, PhD, elaborated on the challenge of ensuring adequate manufacturing capacity without excessive spending.

"It would be imprudent for us as a business to take a position that we are going to have a contingency plan for every possible outcome, because we would just be overbuilding," Levinson observed.

"We have capacity for our current pipeline and our current long-range plan expectations, [but] that said, if something triples, quadruples, just way over-exceeds our own expectations, we would have to hustle," Hellmann added.

Genentech, however, still has room to expand capacity within the California sites. "At this point, both in South San Francisco and in Vacaville, there are some things that we could do in the case that we needed additional capacity for any reason, including upside on market projections," Hellmann maintained.

"Right now, our major focus in terms of potential expansion would be at Vacaville," she noted, adding that capacity will increase 50% to address the needs of the current pipeline. "Xanelim (anti-CD11a) and anti-VEGF will be two big drivers of our capacity needs going forward."

The expected Xolair launch is also affecting Genentech's financial reporting going forward. Profit splits from the Xolair and Rituxan collaborations will be taken out of the marketing, sales and administration line and reported separately, CFO Louis Lavigne said.

Collaborator profit splits totaled $133 mil. in 2000, roughly a quarter of the $497 mil. in administrative expenses. Genentech collaborates with Novartis and Tanox on Xolair, and Idec and Roche for Rituxan.