Thursday December 21, 1:30 pm Eastern Time
The biotech's Campath venture will boost revenue -- more so if approved for other indications.
Millennium Pharmaceuticals (NasdaqNM:MLNM - news) and Ilex Oncology (NasdaqNM:ILXO - news) can smell success, as their drug Campath is one step shy of getting FDA approval.
FDA approval is more than likely to happen and a product launch is expected in early 2001. Campath will be both Millennium and Ilex's first drug commercialized, but don't expect blockbuster sales.
Recently, the FDA oncology advisory committee recommended that Campath, a humanized monoclonal antibody, be approved to treat a difficult type of leukemia. The drug is aimed at some patients with chronic lymphocytic leukemia, the most pervasive adult form of the disease.
About 10,000 to 15,000 of the estimated 120,000 patients with lymphocytic leukemia annually fail a series of drug treatments, including one known as fludarabine therapy. Campath is aimed at this small segment of people with no other option.
Sharing With Schering
Campath, an injectable drug, was originally developed by Ilex and LeukoSite, which Millennium acquired late last year. Campath will be distributed overseas by Germany's Schering AG (NYSE:SHR - news) and in North America by its US subsidiary, Berlex Laboratories Inc. There will be equal revenue sharing for Ilex and Millennium, and Schering in the joint venture.
I expect increased revenue, especially if Campath is approved for additional indications. Presently, Campath is in Phase II clinical trials to treat non-Hodgkin's lymphoma, acute transplant rejection and multiple sclerosis. Those all have much larger patient targets than the segment of lymphocytic-leukemia patients Campath is under FDA review to treat.
I've always liked Millennium, not because it is a genomics company, but it is a company that changes to meet the market's expectation through its business strategy. It's a growing company that is trying to meet the demands of both the scientific and business world.
Millennium's technology encompasses large-scale genetics, genomics, high-throughput screening and informatics. The company focuses on gene and target identification that has been validated by numerous biopharmaceutical partners, resulting in more than $1.7 billion in potential partnership funding.
The acquisition of LeukoSite put Millennium closer to being a card-carrying pharmaceutical company. LeukoSite not only had Campath in late-stage clinical trials, but six additional products in different stages of clinical testing.
Thus, Millennium inherited a rich product pipeline, bringing it closer to achieving near-term commercial opportunity.
In addition, wholly owned subsidiary Millennium Predictive Medicine focuses on diagnostics and pharmacogenomics. Not bad for a biotech initially considered as only a genomics company.
New Millennium for Millennium
At the beginning of the year, Millennium announced that it intended to have 10 drug candidates in clinical testing by the end of the year. At the moment the company has eight in its pipeline, but investors shouldn't worry, as Millennium is aggressively integrating a broad and diverse technology platform.
Also, Millennium has stated it is actively seeking merger and acquisition opportunities with companies who have drugs in late-stage development.
The company wants to develop drugs for cancer, inflammation and metabolic disorders, enhance drug development, form alliances and further its technology through mergers and acquisitions. And with plenty of cash on the balance sheet, Millennium has the means to transform itself from a genomic/drug discover to a biotech company with real products.
Millennium continues to have the momentum to do well in the market especially since it is so highly followed by institutional players. Right now its share price has factored in the good news and will probably suffer a small pullback on profit-taking. Once the dust has settled, Millennium is a good play for investors over the long run.
Nadine Wong is editor and publisher of the BioTech Sage Report http://www.biotechsage.com , the leading biotech investment newsletter in the nation. Her weekly column looks at the hottest stocks in the biotech sector. She doesn't hold positions in any of the companies mentioned.
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