Biotech Values

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More on SGP’s R&D presentation:

http://www.reuters.com/article/marketsNews/idINN2452738320081124

› Schering-Plough Touts Pipeline Stars

Mon Nov 24, 2008 2:31pm EST
By Ransdell Pierson and Lewis Krauskopf

KENILWORTH, N.J., Nov 24 (Reuters) - Schering-Plough Corp (SGP) touted five "stars" of its product pipeline nearing the market on Monday and highlighted a series of earlier-stage medicines that it said could be first and best in new classes of treatment.

All told, the drugmaker predicted that seven drugs in its pipeline could reach at least $1 billion in annual sales, with four more that could achieve $500 million.

Schering-Plough claimed its robust research pipeline and its relatively low exposure to patent expirations and generic competition set it apart in the pharmaceutical industry.

"We believe we're hitting the sweet spot on product flow and expected exclusivity at a time so many of our competitors will be facing product droughts and patent cliffs," CEO Fred Hassan told analysts at a meeting at its New Jersey headquarters to review its research pipeline.

"Because the company has a lack of generic exposure in the near term, even modest opportunities can have a meaningful impact on their bottom line," BMO Capital Markets analyst Bert Hazlett said. "They have a collection of solid opportunities."

The company highlighted five medicines in late-stage development or under review by regulators, the foremost being its TRA blood-clot treatment.

Schering-Plough said it was in its interest to maintain full control of the TRA program, after previously indicating it might seek a partner to share development risks and costs. It hopes to seek approval for the drug in 2010-2011 for TRA, which it said has multibillion-dollar sales potential.

Two other drugs with potential for sales exceeding $1 billion were Simponi, also known as golimumab, which is under review by regulators as a rheumatoid arthritis treatment; and its hepatitis C drug, boceprevir, which the company hopes to file for approval for in 2011-2012 and said has proven sustained effectiveness without rash problems tied to rival medicines.

But analysts cautioned at the meeting that two "stars" have been held up by the U.S. Food and Drug Administration.

One, a schizophrenia treatment, now known by the brand name Saphris, and also called asenapine, has seen its approval delayed. The FDA earlier this year unexpectedly rejected Bridion, which reverses the effects of anesthesia.

Citigroup analyst John Boris said Saphris and Bridion are "critical for revitalizing the U.S. franchise" and was concerned about them. Bridion is likely to require a safety study on allergic reactions, Boris said.

Of the promising earlier-stage products, one has the potential to treat psoriasis and Crohn's disease without infections seen in standard treatments. Another is a fertility drug, known as an LH agonist, which can be taken orally.

A third is beta secretase inhibitor for Alzheimer's disease that addresses a certain type of brain plaque. A drug for Parkinson's disease, known as preladenant, met the main goal of a mid-stage trial, Schering-Plough announced on Monday.

It also revealed it would start human research next year for a flu vaccine made from living cells rather than chicken eggs.

Monday's meeting was the first update for investors on Schering-Plough's research pipeline since its purchase of Organon Biosciences a year ago.

It comes as its prospects have been overshadowed this year by controversy over the safety and effectiveness of its cholesterol drugs, Vytorin and Zetia. Total sales of the drugs, which the company markets with Merck & Co (MRK), fell 15 percent in the third quarter.

Shares of Schering-Plough had fallen 46 percent this year through Friday, compared to a 28 percent drop for the American Stock Exchange Pharmaceutical index.‹