Replies to post #71728 on Biotech Values

[DewDiligence]

Roche Subsidiary, Chugai, Falls on Actemra Deaths

[In December, the FDA overruled a positive advisory panel and delayed Actemra approval by at least a year (#msg-33965815); they are probably glad they did.]

http://www.reuters.com/article/marketsNews/idINT37274120090318

›Wed Mar 18, 2009 5:19am EDT

TOKYO, March 18 (Reuters) - Shares in Chugai Pharmaceutical Co, the Japanese subsidiary of Swiss drugmaker Roche Holding AG, fell 5.9 percent after Chugai reported 15 deaths among users of its Actemra arthritis drug.

Japan was the first country to approve Actemra for rheumatoid arthritis [#msg-28531319]. Roche has seen the drug as a potential blockbuster. Actemra won approval in Europe in January, but has yet to be approved in the United States [#msg-33965815]

Chugai shares closed down 94 yen at 1,497 yen, underperforming the benchmark Nikkei average .N225, which gained 0.3 percent, after it reported the deaths among 4,915 users of the treatment.

Roche shares were down 1.2 percent at 145.30 euros.

"The fact that the causal relationship was not denied means there is a possibility that Actemra may have had an impact," said Chugai spokesman Masayuki Yamada.

One analyst, however, said a death rate of 0.3 percent was not a surprise and would not affect the outlook for the drug's marketability.

The data "may seem like negative news at first glance, but we believe it will not affect significantly the potential of the drug", Merrill Lynch analyst Ritsuo Watanabe said in a note to clients.

Chugai said in a monthly report on Actemra's side effects that it could not deny the possibility of a link between the deaths and the use of Actemra.

It said there had been 221 cases of serious side effects.

Known chemically as tocilizumab, Actemra is an anti-interleukin-6 receptor antibody and works in a different way than the existing multibillion-dollar-selling class of biotech drugs for arthritis that block an inflammatory protein called tumor necrosis factor (TNF).

Roche's pharmaceuticals chief, William Burns, has [this should say “had”] projected peak sales of the drug at $2 billion to $4 billion a year, though analysts forecast lower sales.

Roche holds nearly 60 percent of Chugai.‹

[The Dean]

Thanks alot for your help, so it looks like the big day is in March. I'm not so worried about the eventual approval, just looking at the options for March expy. Some consultant says there is better than a 50% chance of approval, it's a fatal condition, and there are no other drugs approved. Plus it's approved in Japan, but I don't know if that is significant or not. There was also a 30 million share insider purchase by the beneficial owner. And according to the options, some would require the stock price to get to around 430/share to pay off. On one hand, I'm thinking about OTM calls to allow for some upward movement, on the other, the ITM calls provide a better premium and this cushions a bit more if the decision goes the wrong way. However, if the price per share dives to say, 7.00, it's still a big loss. Tough decision

The difference between success and failure is often ONE DECISION!

[DewDiligence]

Cases Where FDA Rejected a Drug Endorsed by Advisory Panel

[Added ITMN’s pirfenidone. Note: this
table does not purport to be exhaustive.]

 
                       Panel Vote   Date of FDA    Ultimate     iHub  
 Company    Drug      For Approval  Non-approval   Resolution   Reference 
 DNDN    Provenge         13-4         5/07       apprvd 05/10  #msg-19483904 
 ITMN    Pirfenidone       9-3         5/10         pending     #msg-49777513 
 MRK     Bridion*         14-0         8/08         pending     #msg-31141155 
 PFE     Oporia†           9-3         1/09         pending     #msg-34890112 
 Roche   Actemra          10-1        12/08       apprvd 01/10  #msg-33965815 
  
 *a/k/a sugammadex. 
 †a/k/a lasofoxifene.