Pfizer/OSI To Curtail Macugen Research In Response To Genentech Competition
This article was originally published in The Pink Sheet Daily
Executive Summary
Firms will wind down select Phase III trials for Macugen to reallocate resources toward positioning the AMD treatment as a maintenance therapy.
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OSI Pharmaceuticals said it plans to curtail research of its wet age-related macular degeneration therapy Macugen (pegaptanib) due to slumping revenues stemming from the launch of Genentech's Lucentis (ranibizumab), as well as its Avastin (bevacizumab), which is used off label to treat AMD. Lucentis was approved by FDA June 30 with a favorable label, offering optional dosing once every three months based on the results of Genentech's PIER study (1 (Also see "Genentech’s Lucentis Ships June 30 Following Approval" - Pink Sheet, 30 Jun, 2006.)). "Two principal competitor developments this quarter impact our thinking on Macugen and the evolving AMD market," OSI CEO Colin Goddard stated during a Q2 conference call Aug. 7. "They are the results of the Genentech PIER study for Lucentis and the subsequent approval." However, Goddard pointed out that the results of the PIER study demonstrate that less frequent dosing of Lucentis was not as effective as monthly dosing. Labeling for Macugen recommends dosing every six weeks. "This further supports the scientific rationale behind our sequential dosing approach for Macugen, an approach that has been popularly referred to as induction maintenance," he said. "The OSI/Pfizer alliance is committed to investing in the brand in a way that can establish a viable or meaningful role for [Macugen] in the wet AMD market and positions the product competitively for expansion into other indications," the exec noted. For example, the firms are examining pegaptanib in the treatment of diabetic retinopathy and, separately, were encouraged by results presented in July at an Association for Research in Vision and Opthamology conference which examined initial treatment of AMD using Avastin followed by Macugen as a maintenance therapy. Nonetheless, Goddard said the short-term market dynamics for Macugen in the U.S. are not favorable. As a result, OSI/Pfizer will continue researching Macugen as a treatment for induction maintenance, but will discontinue other trials. The firms will proceed with an open-label study, LEVEL, which is already enrolling and is designed to evaluate treatment of patients who take Macugen after initiating on another treatment. "If Macugen can sustain vision over the course of that 12-month interval at reduced dosing frequencies...it will provide an alternative to continuous monthly dosing of Lucentis or Avastin," OSI Eyetech President Paul Chaney said. The drug makers will wind down a number of other Phase III trials. OSI's overall R&D spending in eye disease will significantly decrease beginning in the fourth quarter, CFO Michael Atieh added. As a result of the strategic shift, OSI took a one-time estimated impairment charge of $319 mil. in Q2 related to a goodwill acquired through the company's November 2005 purchase of Eyetech, which had developed and launched Macugen in January 2005 with Pfizer 2 (Also see "OSI Closes Lid On Eyetech Acquisition" - Pink Sheet, 14 Nov, 2005.)). U.S. sales of Macugen plummeted in the quarter. The company reported sales of $36.7 mil. in Q2, down $14 mil. sequentially over the first quarter. First year sales of Macugen in 2005 following its launch were $185 mil. Sales of Macugen in 2007 need to reach $100-$110 mil. in order for the firm to break even on its operating expenses for its streamlined eye disease research, Goddard said. During a March 8 investor call, prior to the Lucentis approval, OSI had projected Macugen would generate $200 mil. in 2006. (3 (Also see "Macugen U.S. Sales Could Reach Over $200 Mil. In “Choppy” 2006, OSI Says" - Pink Sheet, 8 Mar, 2006.)). - Jonathan Block |