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June 9, 2003
Volume 81, Number 23
CENEAR 81 23 p. 8
ISSN 0009-2347


Clinical advances and drug approvals are helping to propel biotech stocks


The promise of new cancer therapies coming out of last week's American Society of Clinical Oncology (ASCO) meeting in Chicago has helped restore vigor to the biopharmaceutical industry. It has also gotten a boost from a spate of new product approvals and generally upbeat earnings reports this year.

Genentech and Merck KGaA, the European partner of ImClone Systems, created some excitement at the ASCO meeting. Genentech reported on Phase III trials of Avastin, one of a new generation of antiangiogenesis drugs. In combination with chemotherapy, the monoclonal antibody improved survival rates for advanced colorectal cancer patients by 50%.

Merck reported on seeing antitumor activity using ImClone's monoclonal antibody Erbitux against colorectal, head, and neck cancers. Merck says the results confirm the value of targeted therapies such as Erbitux, which inhibits cancer cell growth by blocking the epidermal growth factor receptor (EGFR). The company plans to apply for European approval this summer.

Back in late 2001, FDA's refusal to review ImClone's Erbitux application initiated a chain of events--including a collapse of the company's stock and the resignation of its management--that weakened confidence in large collaborative deals. Now, ImClone and its U.S. partner Bristol-Myers Squibb want to discuss Merck's results with FDA.

In general, signs from FDA and its new commissioner are positive. The agency has approved several new drugs already this year, including two for cancer: Millennium Pharmaceuticals' Velcade and AstraZeneca's EGFR-inhibitor Iressa. FDA also wants to improve the process for developing and evaluating cancer therapies (see page 18).

Stock prices have been climbing in response to all the recent good news. Genentech's share price jumped 45%, to $54.85 per share, on May 19 when it released early Avastin results. Following its ASCO presentation, Genentech's shares rose again to trade above $73. And ImClone's stock bolted from around $20 to more than $38 per share last week.

The entire biopharmaceutical sector has gained about 40% in market value since mid-April. "We haven't seen this much positive movement since the genomics bubble in 2000," says G. Steven Burrill, CEO of the merchant bank Burrill & Co. Early in that year, biotech company stocks briefly skyrocketed as a draft of the human genome was completed.

However, there's a significant difference this time, Burrill notes. "This recovery is based on far more than hope and hype--it's based on real products, real revenue streams, and real market sustainability," he says.

Biopharmaceutical firms are hoping this is true. With investor interest lagging since mid-2000, the industry has slipped into a period of consolidation and cost-cutting. But one apparent vote of confidence has already emerged; Schroder Ventures Life Sciences is out looking for investments after closing a new $400 million venture-capital fund on June 4.


Chemical & Engineering News
Copyright © 2003 American Chemical Society

Related Stories
Cancer Drug Approval
[C&EN, May 12, 2003]

Pharmaceutical Review
[C&EN, Dec. 2, 2002]

FDA Walks A Fine Line
[C&EN, Dec. 2, 2002]

Pharma Business
[C&EN, Jan. 27, 2003]

Related Sites


Merck KGaA

ImClone Systems


Bristol-Myers Squibb

Millennium Pharmaceuticals


Burrill & Co.

Schroder Ventures Life Sciences

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