Biotech Values

[DewDiligence]

Antigenics Wins Russian Approval of Oncophage Cancer Vaccine

[Russian regulators accepted the retrospective subset analysis that was rejected by the FDA.]

http://www.reuters.com/article/marketsNews/idINN0728116320080408?rpc=44

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Tue Apr 8, 2008 6:25am EDT
By Toni Clarke

BOSTON (Reuters) - The tiny biotechnology company Antigenics Inc said on Tuesday it has won approval to market its kidney cancer vaccine, Oncophage, in Russia, making it the only cancer vaccine available in the world.

The product was approved despite failing to win approval in the United States. It is the first time the Russian government has approved a drug that was not first cleared in its country of origin, Antigenics said.

The company expects to launch Oncophage and potentially begin generating revenue in the second half of this year.

Antigenics is also planning to file for approval of the vaccine in Europe by the end of the year. Unlike the United States, European regulators are sometimes willing to approve a drug on a conditional basis, meaning companies can market their products while simultaneously conducting additional follow-up of patients or further clinical studies. [The US has this too, of course: it’s called Accelerated Approval.] If at the end of the trial period the regulatory agency is not satisfied, it can pull the drug from the market.

"Filing in Europe won't be a slam dunk, and will probably be more difficult than in Russia," Garo Armen, the company's chief executive, said in an interview.

He added that the European review process would likely take 12 to 18 months.

For Antigenics, the Russian approval caps years of dogged determination to bring the vaccine to the market despite the failure of a major clinical trial and investor skepticism towards the cancer vaccine field in general.

Oncophage is designed to reprogram a patient's immune system to target cancer cells from a specific tumor.

The company takes tissue from a tumor following surgery, extracts certain proteins it says activate the immune system and then injects the enriched protein back into the body through the skin.

FAST-GROWING MARKET

A late-stage trial of Oncophage in 2006 failed to show that the vaccine delayed the recurrence of kidney cancer. However, in a subset of patients -- those whose cancer was least likely to recur following surgery -- Oncophage lengthened the period before which the disease recurred by 45 percent, or an average of 1.8 years, versus those in the control group.

The U.S. Food and Drug Administration does not consider subset analysis a valid measure of success or failure since all manner of sub-populations can be carved out retrospectively [i.e. data mining].

Even so, in this case, Russian regulators have accepted the validity of the subset, in part because roughly a third of the 604 patients enrolled in the late-stage trial were tested in Russia, and about 70 percent of those fell into the subset of patients whose prognosis following surgery was better than that of the total population.

There are about 16,000 new cases of kidney cancer a year in Russia, according to Armen, of which about a quarter fit the profile of patients most likely to benefit from Oncophage -- a market theoretically worth about $200 million to Antigenics.

The Russian pharmaceuticals market is one of the fastest growing in the world. It will grow by nearly 60 percent to $19.4 billion in 2009 from about $12.3 billion in 2006, the research group DSM estimates.

Armen said he expects the initial sales ramp-up for Oncophage to be "modest."

"We would have to price this probably at the low to mid range of other new-generation cancer drugs," Armen said.

Such drugs can cost as much as $60,000 per patient per year, he said.

"How much of that market we achieve depends on how well we iron out reimbursement issues and how effectively we can reach every single patient," said Armen, who is learning Russian to help him in the task.

Antigenics, which also receives royalties on a vaccine component known as QS-21 that turbocharges the power of vaccines in general, said Oncophage would need to generate roughly $30 million in sales in order for the company as a whole to become profitable.

Shares of Antigenics have fallen roughly 54 percent to $2.50 over the last 12 months.
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