Washington Editor

Late Wednesday, the FDA approved the next in a growing line of targeted cancer therapies, Amgen Inc.'s Vectibix (panitumumab).

Indicated for colorectal cancer that has spread despite standard chemotherapy treatment, the human monoclonal antibody received an accelerated approval after effectively slowing tumor growth and, in some cases, reducing tumor size.

Christopher Raymond, an analyst with Robert W. Baird & Co. in Chicago, called the approval "very meaningful" for the marketplace and predicted a bright future for Vectibix. He said sales could approach $1 billion by 2009, which doesn't necessarily reflect its high-water mark, and Amgen has forecast a $2 billion peak.

The drug binds to the epidermal growth factor receptor (EGFR) protein, which is expressed on about 70 percent of all colorectal carcinomas. FDA estimates indicate that 150,000 new cases of colon cancer will be diagnosed in the U.S. this year, and 55,000 people will die from colon and rectal cancer in that same time frame. That makes the disease this country's third most common cancer, and its third leading cause of cancer mortality.

Amgen, of Thousand Oaks, Calif., plans to launch the product in the next couple of weeks, and the company said it would price it at $8,000 per month, about 20 percent less than Erbitux (cetuximab), the other anti-EGFr antibody on the market, from ImClone Systems Inc. and Bristol-Myers Squibb Co. According to Raymond, Amgen's management said the pricing "is indicative of their confidence" in Vectibix's future use in a first-line setting. In contrast, he said Erbitux "has had limited uptake" as an off-label, front-line treatment.

A registration trial to broaden Vectibix into second-line therapy is under way, with data on progression-free and overall survival expected in four years. Much earlier than that, front-line findings are expected by the end of this year from a study called PACCE, the Panitumumab Advanced Colorectal Cancer Evaluation Study, which is evaluating the addition of Vectibix to a regimen of Avastin and chemotherapy. The last patient enrolled two months ago, said Cynthia Schwalm, Amgen's vice president and general manager of its oncology business unit. She said the results, which should be released as part of the company's fourth-quarter report, could "answer some interesting questions" about newly diagnosed patients. She added that there have been discussions with the FDA about using PACCE to support a label change, and the final findings would dictate whether to approach the subject again.

At the very least, Raymond said those data would provide "the first look" at Vectibix's front-line potential and "could be a vehicle for physicians to use it off-label" before the second-line registration trial concludes.

Based on this initial approval for Vectibix, he expects it to "displace" Erbitux in second- and third-line settings, certainly among new patients. "All else being equal," Raymond said, the data indicate that Vectibix "looks like it's a better drug."

In comparing warnings on the drugs' labels, Raymond noted that Vectibix has "much kinder" wording. In particular, he pointed out Vectibix's 1 percent rate of severe infusion reactions compared to 2 percent for Erbitux, and the Vectibix label doesn't include a warning about cardio-pulmonary arrest, which Erbitux does. Also, as a fully human IgG2 monoclonal antibody, Vectibix is expected to lessen the risk of an immune response.

Though there haven't been any head-to-head comparisons of the drugs, Raymond said he'd expect Amgen's sales staff to position Vectibix as a safer option, as well as a more convenient one. Vectibix can be administered intravenously once every two weeks, while Erbitux is dosed weekly following a loading dose and antihistamine pre-treatment.

"I would not want to have the job of marketing Erbitux," Raymond said.

That's not the only problem facing New York-based ImClone right now. The company's board is facing a potential shakeup, with new director Carl Icahn seeking stockholder approval to remove up to six of the 12 board members, which was revealed in an SEC filing Thursday, including Chairman David Kies and CEO Joseph Fischer. Icahn already controls four of the board's seats.

Later Thursday, Kies responded by criticizing Icahn for trying to seize control of the company without paying a control premium to its shareholders. Separately and adding to tumult at the top, Chief Financial Officer Michael Howerton resigned Thursday.

In contrast to Vectibix's potential to erode Erbitux sales, Raymond predicted that the new drug would be more complementary to South San Francisco, Calif.-based Genentech Inc.'s Avastin in treating those patients.

As part of Amgen's pricing structure, the company is offering a payment assistance program for those who can't afford Vectibix, which provides Amgen oncology medicines at no cost to qualifying uninsured patients, as well as a new wrinkle: a cap on out-of-pocket expenses for patients receiving Vectibix, regardless of income or insurance status. Once patients reach that ceiling, equal to 5 percent of their adjusted gross income, they will become eligible for the payment assistance program. In addition, the company is handling social assistance to help patients with transportation needs or with entering support groups, which is work that had been done by oncology centers before Medicare cut reimbursement to those practices.

"We're close to our customers," Schwalm said. "We know what they need, we know what they want."

Those initiatives, Raymond said, "poke a hole" in any criticism from the growing number of people against the high costs of targeted cancer therapies. "I've never seen anything like this in oncology."

He added that the overall strategy around the product's cost and assistance in covering it indicates the company's ambitions for Vectibix's front-line use, where revenues would really ratchet up. "The fact that they've gone to all this effort to set themselves up for success in a front-line setting means that there's a pretty good level of confidence that this works," Raymond said.

In addition, he said the company's existing contracts with oncologists for its other cancer drugs, Aranesp (darbepoetin alfa), Neupogen (filgrastim) and Neulasta (pegfilgrastim), would be leveraged to entice physicians to use Vectibix rather than Erbitux.

"This is very much an economic game for a lot of physicians," Raymond said, "and Amgen has two very important franchises in terms of overall drug use for oncologists."

The agency approved the drug on Phase III results showing that it bought about an extra month for patients, making it the first anti-EGFr antibody shown to significantly improve progression-free survival in patients with metastatic colorectal cancer. More specifically, those who received it had a mean time to disease progression or death of 96 days, compared to 60 days in patients receiving the best standard supportive care in the randomized trial of 463 patients who had been treated with fluoropyrimidine, oxaliplatin and irinotecan.

In addition, 8 percent of the patients on Vectibix experienced a tumor shrinkage that in some cases exceeded 50 percent. Both study groups showed similar overall survival.

Amgen acquired the drug through its $2.2 billion buyout of Fremont, Calif.-based Abgenix Inc., with which it was previously developing Vectibix in partnership. The company completed Vectibix's rolling biologics license application in March, and it remains under regulatory review in the European Union, Canada, Australia and Switzerland.

As part of the approval, Amgen committed to conduct a Phase IV trial to show whether the drug improves survival in patients with fewer prior chemotherapies. Future studies could test it in head and neck cancer and lung cancer, as well as in the adjuvant setting for colorectal cancer.

On Thursday, the company's stock (NASDAQ:AMGN) traded down 59 cents to close at $71.55.