Washington Editor

Genentech Inc.'s very positive preliminary Lucentis data rippled quickly throughout the industry and sank shares in Eyetech Pharmaceuticals Inc., which sells the already-approved Macugen.

Such good news coming from South San Francisco's Genentech, an $83 billion company for which the hits seem to keep on coming, is no surprise, but the negative impact at Eyetech, which sells its drug through a partnership with Pfizer Inc., is an unkind reversal.

Not too long ago Eyetech was an investor darling as it turned in the best biotech IPO in 2004 based on Macugen's potential, but Tuesday the stock was treated far more harshly through no fault of Eyetech's, as the shares plunged more than 45 percent. The stock (NASDAQ:EYET) fell $11.02 to close at $12.95, well off the almost $50 per share price the company has traded at in the past year.

Many pointed to Genentech's data as the reason.

"We've never seen a treatment for wet AMD with those sort of results," said Andrew McDonald, an analyst at ThinkEquity Partners LLC in San Francisco. His firm downgraded Eyetech's stock to "sell," noting that the company has no developmental products in its pipeline. "It far eclipses the efficacy we've seen with Macugen and Visudyne."

Genentech's preliminary Phase III findings showed that Lucentis (ranibizumab) met its primary efficacy endpoint, maintaining vision in wet age-related macular degeneration (AMD) patients, as about 95 percent treated with the investigational drug maintained or improved vision (defined as a loss of less than 15 letters in visual acuity) at one year, compared to about 62 percent of those in the control arm (p<0.0001). Also, Lucentis patients averaged a significant improvement in visual acuity compared to visual acuity at study entry, one of the trial's secondary endpoints, while the control group showed a substantial decrease in mean visual acuity from baseline.

Called the MARINA study, the U.S. trial included 716 patients with minimally classic or occult wet AMD who were randomized 2:1 to receive intravitreal Lucentis injections or a sham injection as control. Lucentis patients were further randomized to receive either a 0.3-mg or 0.5-mg dose of the drug once a month for two years. Genentech said it would report more complete one-year data in two months at the American Society of Retina Specialists meeting in Montreal.

The internally developed drug, a humanized antibody fragment, is designed to bind and inhibit vascular endothelial growth factor-A (VEGF-A), a protein thought to play a role in angiogenesis. Macugen (pegaptanib sodium injection), a pegylated aptamer, works in the same way, and both are delivered via intravitreous injection. But McDonald noted that Lucentis binds five VEGF isoforms, while Macugen binds only one.

"In my opinion," he told BioWorld Today, "that translates into superior efficacy for Lucentis in the clinical setting."

McDonald predicted such an outcome last month, when he forecast better Phase III data for Lucentis than Macugen based on Phase I/II findings on the former.

In defense of its product, Eyetech advised caution on the MARINA data. Noting that the findings stem from a top-line analysis of the first year of a two-year trial, New York-based Eyetech also stressed that Genentech's study includes only patients with minimally classic and occult lesions - different AMD patient populations than those included in Eyetech's VISION study.

"The protocols and designs of the trials are different," Eyetech CEO David Guyer told BioWorld Today. "Notoriously in this disease, we see that unless you compare head to head in the same trial, you can see erroneous conclusions."

He also questioned the placebo response in MARINA, a rate in which sham patients responded better than those on Visudyne. The other product marketed for wet AMD, Visudyne (verteporfin, QLT Inc. and Novartis AG) is an intravenously injected drug activated via photodynamic therapy. Also, Guyer said the MARINA study might have included more early stage patients than the VISION trial, which retrospectively showed higher improvement rates among its early stage patients.

"We have the broadest possible AMD label," he added, "and we decided we would take all comers, which represents the real world . . . Really, it is important that one cannot make such generalizations between trials of such diverse patient groups."

Despite those arguments, McDonald said varying data point to clearly differentiated products, with Lucentis rising above Macugen, which got FDA approval at the end of 2003. To boost his opinion, he noted a 53 percent relative improvement for Lucentis in Phase III, compared to 27 percent for Macugen.

Macugen, which recently received regulatory approval in Canada and was cleared in Brazil Tuesday, also is being studied in diabetic macular edema, an indication in which Eyetech and Pfizer, of New York, plan to begin a pivotal Phase II/III trial in the second half of this year, as well as retinal vein occlusion. The companies co-promote the drug in the U.S., while Pfizer controls activities abroad. But McDonald cautioned that "any trailblazing that Macugen does now will establish a path for Lucentis," calling the two products "virtually interchangeable."

Genentech has out-licensed Lucentis' overseas rights to Novartis, with which it is conducting two additional Phase III studies. Per terms of their partnership, Genentech has commercial rights in the U.S., Canada and Mexico, while Novartis, of Basel, Switzerland, has exclusive commercialization rights in the rest of the world.

One of the trials, called ANCHOR, is testing the drug in predominantly classic choroidal neovascularization in AMD. It is comparing two Lucentis doses to photodynamic therapy in 423 patients in the U.S., Europe and Australia, and results are expected in the fourth quarter. The other, called PIER, is examining the drug in 184 patients with subfoveal choroidal neovascularization with or without classic CNV secondary to AMD. Results are expected in the first half of 2006.

Should the product reach the market, McDonald expects it to quickly undercut Macugen, which generated $23.7 million in net revenues during its first 10 weeks on the market, ahead of Wall Street expectations.

Guyer also noted that Macugen has a dosing advantage - 50 percent fewer injections are needed over two years of treatment compared to Lucentis - as well as a safety advantage by blocking just one VEGF isomer. But McDonald projected a short run of exclusivity, over the next two years, after which there would be "no barrier to switching, and physicians would be crazy to continue treating their patients with Macugen when they have a superior therapeutic at their disposal."

McDonald downgraded the company's stock to an $11 target value.

Genentech's shares (NYSE:DNA) gained $2 Tuesday to close at $78.60.