Biotech Values

[DewDiligence]

GTCB write-up in Chemical Market Reporter:

[There’s a photo of GTCB’s goat pharm in Massachusetts, but you can’t see the goats (they’re all inside). Thanks to ‘floblu’ on the GTCB board.]

http://www.gtc-bio.com/products/GTC_CMR%20Article%208.04.pdf

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With the submission of ATryn (recombinant human antithrombin) for approval in Europe earlier this year, Framingham, Mass.-based GTC Biotherapeutics stands at a new precipice, positioned as the first company in the world to have filed a product manufactured by transgenic animal technology. GTC anticipates European approval for the hereditary anti¬thrombin deficiency (HD) indication and a product launch in mid-2005.

GTC is currently working with the Food and Drug Administration for a clinical protocol in this same indication and plans to file an amended investigational new drug application before the end of this year.

“We are also in the process of partnering this product. The partner would help determine the next indication, and we would expect to start developing ATryn for some larger markets,” says a company official.

The market for HD in Europe is valued at roughly $120 million and worldwide at roughly $250 million, according to analysts. Although it is a rare condition with a limited patient population size, analysts predict that successful commercialization of ATryn would support a sizeable increase in the company’s valuation.

“Management reported that the EMEA [European Medicines Evaluation Agency] has recently responded to the European ATryn filing with a list of questions, of which most can be answered with data on hand,” says SG Cowen analyst Phil Nadeau. “Additionally, the company indicated that there appears to be no need for additional clinical trials to demonstrate the efficacy of ATryn or the safety of the transgenic technology.”

Analysts are also positive on the strategic position that ATryn will give GTC when approved in Europe, saying that the approval and successful commercialization of the product would validate the company’s transgenic technology and help drive broader adoptions of this technology.

“We believe that recombinant antithrombin has two distinct advantages over antithrombin sourced from human blood plasma, which is currently the only form of antithrombin sold on the market,” says the GTC company official. “These advantages involve the safety of the source material and the abundance of supply.”

As the only source for antithrombin on the market today, blood plasma carries a safety concern over biological contamination. “There is always the risk that blood can be sourced from humans who may not have a fully known or fully recorded health history,” says the GTC official. “However, because antithrombin, and in particular blood proteins, are very difficult to express in a traditional bioreactor setting, there is not yet a recombinant form commercially available. In comparison, ATryn is manufactured in the milk of goats, whose health history is known and recorded from the very beginning, allowing us to control the biological safety of the source material.”

Second to having a relatively safe source of antithrombin, GTC’s transgenic technology offers the advantage of producing an abundant supply that is relatively cost effective compared to investing in the scale up of bioreactor capacity, according to the official. “Our transgenic technology allows us to theoretically achieve a consistent, easily scalable flow of antithrombin supply within a production system that is worth roughly 10 percent below the capital investment required in the implementation of new bioreactor equipment.

“In addition, it’s a linear process. The biggest investment is up front to get to the source animal. Once you have the DNA—the protein of interest—stably incorporated into the genome of that animal (i.e. the founder), it produces that protein the same way at each milking cycle. Further on down the line, the daughters of the founder produce the protein in the same way and so on. As a result, the first supply of milk from the founder can be entered into clinical trials, and then you can expand production as you’re making progress in clinical development, rather than dealing in lump batches,” he adds.
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