Dendreon Drug Approval Raises Hopes For Others, Industry

Date : 04/30/2010 @ 4:49PM
Source : Dow Jones News
Stock : Vical Incorporated (MM) (VICL)
Quote : 2.41  0.0 (0.00%) @ 7:00AM

Dendreon Drug Approval Raises Hopes For Others, Industry

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The Food and Drug Administration approval of Dendreon Corp.'s (DNDN) new prostate cancer therapy offers hope to patients. It could also help developers of similar drugs.

On Thursday, the FDA approved Provenge, the first of a new class of cancer therapies that work by stimulating the immune system to attack the disease. Seattle-based Dendreon had been trying to get approval for Provenge since late 2006, but was asked to find more data.

The approval of Provenge is a dramatic development in the fight against cancer and could pave the way for a host of similar therapies. Other companies, including Celldex Therapeutics Inc. (CLDX) and GlaxoSmithKline PLC (GSK, GSK.LN), are developing products that work the same way. Provenge's approval suggests those products could make it to the market, potentially stimulating new interest from pharmaceutical companies and venture capitalists.

"It sets the stage, or at least facilitates, the approval of other cancer vaccines," said Michael Becker, chief executive of MD Becker Partners, a management consulting and strategic advisory firm for life science companies. "It is a watershed event in that regard."

The approval of Provenge is similar to the 1997 approval of Rituxan. That therapy was the first monoclonal antibody to reach the market and ushered in a new era for biologic drugs. Within five years, five more monoclonal antibodies were approved in the U.S., a pattern that Becker predicts will be repeated with cancer vaccines.

Robert Baird & Co. analyst Christopher Raymond believes Provenge will improve investor perception of the entire biotech industry, which has suffered from funding problems and lackluster initial public offerings. Financing re-emerged for biotechnology companies after successful data about Avastin, another cancer therapy, emerged in 2003, he said.

Plenty of companies could benefit from renewed interest in cancer vaccines. Among them: Celldex, which is developing a brain cancer vaccine with Pfizer Inc. (PFE), and Geron Corp. (GERN), which has a midstage vaccine for acute myelogenous leukemia. GlaxoSmithKline has a vaccine for lung and skin cancers in late-stage trials.

Other companies involved in the space include Bristol-Myers Squibb Co. (BMY), Vical Inc. (VICL) and Biovest International Inc. (BVTI).

Still, an improved image for cancer vaccines won't be enough. These companies need to prove their drugs work and get them cleared by the FDA, which can be rigorous for any therapeutic class.

Concept Capital's Washington Research Group said the Provenge approval demonstrates what's needed by the FDA. But it notes that different drugs may have a harder time than others, and the agency will continue to review drugs in a "case specific nature."

While Provenge is personalized for each patient, Becker notes that only 27% of cancer vaccines in development at both public and private companies use a similar method. The rest are "off the shelf," meaning that they are the same for everyone, but still aim to stimulate the immune system.

Provenge provides proof that the method works, but the future will be in off-the-shelf treatments that will be easier to make and have a lower price tag, Becker said.

-By Thomas Gryta, Dow Jones Newswires; 212-416-2169;


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