12:00 AM
 | 
Sep 27, 2004
 |  BioCentury  |  Finance

Ebb & Flow

BioMarin's first announcement related to Orapred, the flagship of its new pediatrics focus, wasn't a great one, as the company expects no revenue contribution from the pediatric asthma drug in the second half. Moreover, there's a possibility that BioMarin (BMRN; SWX:BMRN) could be on the hook for any product returns.

BMRN gained Orapred through its purchase of the Ascent Pediatrics business of Medicis (MRX), which was announced in April and completed in May (see BioCentury, April 26). BMRN had expected the drug to post full year sales of $42 million. In the first half, MRX booked about $13.4 million in sales and BMRN booked about $4.6 million, for total first half sales of $18 million.

But last week, BMRN said that larger-than-expected quantities of Orapred held by distributors will result in no revenues to BMRN from sales of the drug in the second half of 2004.

Normal inventory would be four to eight weeks of supply, said spokesperson Joshua Grass. "But it seems that there never were normal levels of Orapred inventory," he said. "We tracked shipments and sales from January to the time the deal closed, and didn't see anything that concerned us. But we now think the problem goes further back. Knowing what we do now, we'd have done more due diligence."

Although the company said it could be responsible for product returns, depending on specific distributors and their return policies, BMRN is not concerned about the issue. "We expect that the material has sufficient dating on it," said Grass. "We think we've outlined the worst case scenario."

If there were a return risk, BMRN would have included it in its amended guidance, he said. For the year, BMRN now expects to post a GAAP net loss of $137-$140 million. Before the earnings warning, the company expected a net loss of $112-$114 million. BMRN expects to end the year with $70-$75 million in cash, down from its previous guidance of $85-$90 million. On the week, BMRN was down $1.01 (16%) to $5.26.

Private rounds

Cancer play Sopherion plans to use a portion of the proceeds from its $47 million financing to resurrect Myocet liposomal doxorubicin in the U.S. Following the history of that compound could qualify one for premier frequent flier status.

The product originated at The Liposome Co., and received a negative FDA panel recommendation as first line therapy to treat breast cancer in 1999. Liposome Co. then was acquired by Elan (ELN), and the compound was subsequently approved in Europe in 2000. After that, it was approved in Canada, but is not marketed there.

Zeneus (formerly Medeus) gained Myocet when it purchased ELN's European sales and marketing business in February. Last week, Sopherion licensed the North American rights to the compound.

Sopherion is targeting a Canadian launch in the first half of 2005. Ronald Goldfarb, president, CEO and CSO, told Ebb & Flow that the company "will be able to cover the whole country." Sopherion plans to start with at least six reps and could expand from there.

In the U.S., the company plans to meet with FDA and hopes to receive an SPA for open-label Phase III trials of Myocet as a second-line therapy for breast cancer.

Although the 1999 FDA panel agreed that Myocet has less cardiotoxicity than doxorubicin, the members were concerned about the lower survival rate for Myocet patients in a Phase III trial(see BioCentury, Sept. 20, 1999).

Sopherion's internal discovery engine is based on identifying peptides with drug-like properties. "Our mini-pep display technology circumvents certain limitations of phage display," Goldfarb said. "We can get both agonists and antagonists" of a given target.

The company's most advanced mini-pep compounds are in preclinical development and function via anti-angiogenesis or anti-metastasis...

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