The New America
`Biotech's Drug Pipeline Ready To Rupture
`
`ICOS CORP. I Bothell, Washington
`
`ily quarter over quarter.
`1mpany will derive more
`
`% of total revenue
`:cale
`
`25%
`
`By Philip Michaels
`Investor's Business Daily
`
`Mixed Bag
`Ieos is testing several drugs for a variety of indications. Here are the
`five drugs that are furthest along:
`
`1
`
`A7
`Investor's Business Daily
`
`blue-green tinge to vision.
`lcos and Lilly set up a joint venture
`in October to develop PDE5 inhibitors
`to treat both male and female sexual
`dysfunction. JC351 is the lead product
`in that venture. Lilly has said it hopes
`the drug will be ready for regulatory
`review in 200 I. Plovanic says.
`Lilly paid Ieos S75 million upfront
`and will make milestone payments as
`IC351 moves through testing. Lilly and
`Ieos will split North American and
`European profits equally. Ieos gets a
`royalty from Lilly for sales outside
`·
`those regions.
`is not your typical part(cid:173)
`"This
`nership," Doering said. "Usually a
`development-stage company gives a big
`(drug company) exclusive rights and
`gets a royalty. This allows Ieos to share
`the profits."
`The Lilly deal gives Ieos enough cash
`to continue its ambitious development
`plans, analysts say. At the end of the
`first quarter, the company had $66.3
`million in cash.
`Look for Ieos to pursue similar deals,
`analysts say. But the company prefers
`to wait to line up partners until its
`drugs are nearing pivotal trials.
`"You want to hold out as long as you
`can," Plovanic said. "Then you can
`realize the full value of the product."
`The Lilly deal also helped Ieos finish
`in the black last year. It earned 6 7 cents
`a share. But neither the company nor
`analysts plan to see a repeat of that feat
`in 1999. In fact, most analysts don't
`expect profits until at least 2002.
`Ieos should lose $1 .29 a share in
`1999, First Call says. That loss could
`widen to $2.07 in 2000. The company
`trades as ICOS near 37.
`Analysts also like the track record(cid:173)
`and financial muscle -
`of Ieos· man(cid:173)
`agement team.
`Chairman, President and CEO
`George Rathmann co-founded biotech
`powerhouse Amgen Inc. The board of
`directors includes a former head of
`IBM Corp. , a former Secretary of
`Commerce and Microsoft Corp. Chair(cid:173)
`man and CEO Bill Gates. Rathmann
`and Gates are Ieos· two largest share(cid:173)
`holders.
`
`20
`
`15
`
`10
`
`5
`
`3
`
`04
`
`01 '99
`
`N G 0
`ation Design
`1g' Software
`
`t Greg Vogel of NationsBanc
`,ornery Securities.
`:ht now, it's a race to secure
`t share and mind share," he
`fogel expects revenue to rise
`o $39.9 million this year and
`> $64 million in 2000.
`1es many smaller Web design
`nies that use ColdFusion, a
`·r of large companies use it to
`e their largest online applica(cid:173)
`They include Autobytel.com,
`: Co., Hewlett-Packard Co.,
`'orp., J.C. Penney, the IRS and
`' Parcel Service.
`reason: ColdFusion works
`II key technologies and plat(cid:173)
`It can connect to a Microsoft,
`' or Oracle database. h lets
`mmers use tools specific to
`Notes and Microsoft Ex(cid:173)
`:. And if a company has a very
`stem, ColdFusion can learn
`use whatever data it uses, too.
`·e are about 100 million Web
`in the U.S., and that number
`double within three years,
`ing
`to
`International Data
`More companies are turning to
`et to court those potential
`1ers, creating ample demand
`eractive products like the ones
`11c:inn f"':ln f"rP'!lltP
`
`It's the rallying cry in any game
`of chance: The more you play, the
`better your odds of winning. And
`it holds true in biotechnology as
`well.
`Companies trying to bring new drugs
`to market run the risk that a product
`which works in theory may not pan out
`in clinical trials.
`The potential for failure puts a
`premium on companies whose drugs
`target multiple diseases. That way,
`explains analyst William Plovanic of
`LaSalle Street Securities, if one indica(cid:173)
`tion fails, there's always the chance
`another one will hit.
`"It's a numbers game," Plovanic
`said.
`It's a game that Ieos Corp. has
`played with aplomb. The biotech com(cid:173)
`pany has
`leveraged a strong cash
`position into an expansive pipeline.
`Ieos has five drug candidates in
`human trials. Four of those target
`multiple indications.
`"They're trying to become the next
`large biopharmaceutical company,"
`Source: Company reports
`Plovanic said. "And they're doing
`Madison Securities in Chicago.
`everything right."
`Furthest along is LeukArrest. In
`A deep pipeline, impressive manage(cid:173)
`January, the company began a Phase
`ment and a new partnership with drug
`III trial on ischemic stroke patients.
`giant Eli Lilly & Co. have fueled
`The antibody is in earlier trials to treat
`enthusiasm about Ieos. That's despite
`hemorrhagic shock, multiple sclerosis
`the fact the company should continue
`and heart attacks.
`to run in the red for the next several
`years.
`"You're not sure which disease it's
`going to be successful with and which
`In the first quarter, Ieos lost 17 cents
`one it won't," Plovanic said. "By going
`a share, vs. a 21-cent loss a year before.
`after difTerent diseases, it increases the
`Revenue rose 144% to $16.1 million,
`probability (Ieos) is going to have a
`thanks to stepped-up cost reimburse(cid:173)
`winner on its hands."
`ments for research programs.
`In stroke patients, the flow of blood
`But it's not Ieos' financials that have
`to the brain is restricted by blocked
`people excited. It's the company's
`vessels. Tissue gets even more damaged
`potential.
`when white blood cells enter the area,
`"For a biotech company that's in the
`causing inflammation.
`development stage and not profitable,
`they really have a pipeline like no
`Ieos believes LeukArrest can prevent
`other," said analyst Sharon Doering of
`white blood cells from entering the
`CELGENE CORP. I Warren, New Jersey
`
`Product candidate
`LeukArrest
`
`ICM3
`
`Status
`Indication
`Phase Ill
`Ischemic stroke
`Phase II
`Hemorrhagic shock
`Multiple sclerosis
`Phase II
`Phase II
`Heart attack
`Preclinical
`Cerebral vasospasm
`Preclinical
`Head trauma
`Preclinical
`Kidney transplantation
`Preclinical
`Rest enos is
`Severe psoriasis
`Phase 1/11
`Crohn's disease
`Preclinical
`Inflammatory bowel disease
`Preclinical
`.. ' ..... ' ................... <?~~~~ .~~~~~p~~.~~. ~~)~?~!~~ .......... 0 • • • • • • • • • • • ~~~.~!i.~!?.~! ... .
`Pafase
`Acute respiratory distress
`Phase II
`Asthma
`Phase II
`Pancreatitis
`Phase II
`Cardiac ischemia
`Preclinical
`Inflammatory bowel disease
`Preclinical
`Necrotizing enterocolitis
`Preclinical
`Organ transplant preservation
`Preclinical
`............................ ~YP~. ~. ~~~.~~~~~ ................................... ~r~!i.~!?.~! ... .
`IC351
`Erectile dysfunction
`Phase II
`Female sexual dysfunction
`Preclinical
`Phase II
`Severe sepsis
`
`• • • • · - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 0 • • • • • • • • • • • • • • • • • • • • • • • • • • • 0 • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
`
`IC14
`
`nervous tissue. That could reduce total
`brain damage. Indeed, Phase II trials
`showed the drug was safe and sug(cid:173)
`gested
`improved neurological out(cid:173)
`comes.
`But the product getting the most
`attention is IC351 , an impotence drug
`in Phase II trials. Analysts see the drug
`as a potential rival to Pfizer Inc.'s
`Viagra, which posted $788 million in
`sales last year.
`the
`inhibits
`IC351
`Like Yiagra,
`PDE5 enzyme that regulates smooth
`muscle. Blocking that enzyme increases
`blood flow, resulting in an erection.
`The difTerence? IC351 blocks PDE5
`more selectively, says Andrew Heyward
`of Seattle-based Ragen MacKenzie.
`That could eliminate some of the side
`effects associated with Yiagra, such as a
`
`Reviving Controversial Drug To Fight Cancer
`
`INTELGENX 1021, pg. 1