Nowhere but America makes it possible for a company to pursue its dreams for 28 years without making a profit. Even in the most optimistic times, it’s hard to explain.
So how can it possibly be, in the depths of recession, that things are looking up at Waltham, MA-based ImmunoGen? This company has been around since 1981, burned through more than $300 million in investors’ money, and still doesn’t have an FDA-approved drug to show for it. Yet the stock chart says ImmunoGen (NASDAQ: IMGN) is up 60 percent from where it was exactly one year ago. I got some insight into why from new CEO Dan Junius.
The answer is that ImmunoGen is pursuing one of the grand dreams in cancer research, and evidence is slowly mounting that suggests it may actually work for patients. The idea is to develop an engineered antibody drug that can hit cancer cells, spare healthy ones, and unload a potent toxin inside tumors for that extra killing kick. Some of the biggest-selling cancer drugs today, like Genentech’s trastuzumab (Herceptin), are engineered antibodies that hit a specific target on cells, yet lack that knockout punch. Couldn’t they be even better as targeted “smart bombs?” Nobody has turned this idea into commercial gold, but Genentech is betting big on just such a souped-up version of the original trastuzumab that uses ImmunoGen technology. The new drug is now entering the final stage of clinical trials, and with luck, it could be on the market next year.
“Genentech is showing the power of the technology,” Junius says. He adds: “We’re only on the very leading edge of a field that has tremendous potential.”
The data backs up this assertion, at least with the new Genentech drug for breast cancer. Preliminary results from 107 patients in a mid-stage clinical trial showed that about 40 percent had partial or complete tumor shrinkage after taking the drug, trastuzumab-DM1. This happened even after their disease had spread through the body and they had stopped responding to traditional treatment combinations of Herceptin, chemotherapy, or another targeted drug, GlaxoSmithKline’s lapatinib (Tykerb). Just two patients quit taking infusions of the drug because of side effects that were possibly drug-related, researchers said in December at the San Antonio Breast Cancer Symposium.
This finding has prompted Genentech, and its majority owner, Switzerland-based Roche, to push the throttle down into the final phase of clinical trials. Those companies recently started a 580-patient study enrolling patients worldwide. Even before that trial is done, it’s possible Genentech may be able to ask the FDA for approval based on compelling final results of the mid-stage trial, Junius says. That means the souped up drug could arrive on the market as early as 2010. But Genentech is clearly thinking way beyond next year. It said this week that trastuzumab-DM1 appears to be so tolerable that it is looking at studying the drug in earlier stage breast cancer, the so-called adjuvant setting, to prevent breast cancer from relapsing.
What makes this possible is the technology ImmunoGen has been honing for more than 20 years on how to make the proper package of antibody and toxin. One of the key tricks is to attach antibody to the toxin in a way that makes the whole drug stable in the bloodstream, so that the cell-killing payload is released in the tumor where it belongs, Junius says. Genentech already had an antibody that it knew hit a proper target on cells for about one-fourth of breast cancer patients. What it needed was a method to link that antibody to a toxin from ImmunoGen to make it more potent.
This may sound straightforward, but the field has been plagued with failures. The first drug to work like this, Wyeth’s gemtuzumab ozogamicin (Mylotarg), has been a commercial flop since it was approved in May 2000. One key reason: The drug didn’t have a stable enough linker between the antibody and the toxin, which meant that the toxin broke off early and started floating around the bloodstream, causing side effects, before it could get to the tumors. (ImmunoGen isn’t the only company with an idea on how to solve this problem. Bothell, WA-based Seattle Genetics (NASDAQ: SGEN) has been soaring this year after it reported outstanding results of an empowered antibody drug for Hodgkin’s disease at a medical meeting in December.)
If ImmunoGen has really solved this problem, it stands to reap big rewards. Antibody drugs as a class generated $18 billion in sales in 2008, Junius says. Worldwide sales of Herceptin alone exceeded $4.3 billion last year, and ImmunoGen stands to collect a “mid-single digit” royalty on worldwide sales of the newer version. That means if the more potent Herceptin can reach that same level of sales, and ImmunoGen actually gets a 5 percent royalty, it would collect $215 million a year without having to spend a penny on its own sales force.
Junius is clearly excited to have such meaty data from Genentech to tell investors about, but he’s also quick to point out ImmunoGen isn’t putting all its eggs in that one basket. The company has eight drugs in clinical trials, five of which are being pushed ahead by partners, while it retains full ownership of three others, Junius says. The current pipeline is built on hard knocks of the past, in which ImmunoGen learned that certain tumors respond differently to drugs that combine antibodies with toxins. (For example, for cell biology nerds out there, it apparently makes a difference whether the antibody itself gets chopped up once inside a tumor, or whether the linker gets sliced up to release the toxin, Junius says.)
Like with every biotech company today, I had to ask Junius if he has enough cash to soldier on through this downturn. ImmunoGen has about a year’s worth of cash on hand, so it still needs to watch its expenses carefully, especially in a stock market where it’s not easy to hit up investors for another round of financing, Junius says.
Junius, 56, has spent his career on the financial side of the business, and was promoted from chief financial officer to CEO in January to replace Mitchel Sayare. Maybe because ImmunoGen has been humbled by dashed hopes of the past, Junius said he wanted to steer clear of too much bravado.
For example, at the end of our conversation, when I asked him if he has a vision of building up a sales and marketing team and becoming a fully-integrated company, he said he has no intention of building up that capability now. The company needs to watch its spending, he says. ImmunoGen has suffered in the past from what he called “self-inflicted wounds” in which it struggled to get people to enroll in studies fast enough, which is important in order to get a clear answer on how to best spend company resources, he says.
“I’m probably the wrong kind of guy to be in this industry, but I’m actually risk-averse,” Junius says. “We really should walk before we try to run. Right now, we’re somewhere between crawling and walking.”
By posting a comment, you agree to our terms and conditions.