GENENTECH <GENE> SETBACK VIEWED AS TEMPORARY
Genentech Inc is suffering only a
temporary setback following a U.S. agency decision to withhold
a recommendation on its genetically-produced drug which is used
to treat heart attacks in progress, industry sources and
analysts said.
    "When TPA (the drug) first came on the scene, the projected
time scale for approval was 1990," said Sam Milstein, a
scientist and industry consultant.
    "So even with the new delay that has arisen, in all
likelihood the drug will be approved prior to initial
projections," he added.
    Last Friday, an advisory committee at the Food and Drug
Administration, FDA, withheld a recommendation on Genentech's
tissue plasminogen activator, a drug called Activase.
    Athough it supported Genentech's claim that the drug
dissolves blood clots, the FDA said it wanted data that showed
the treatment benefits heart-attack victims.
    "We will be talking to the FDA as soon as possible to ask
specifically what they are looking for," a Genentech
spokeswoman said. She said the company had data that showed
improvement in the heart muscle after the drug was administered
but had not included it in the FDA filing.
 
    Industry analysts also said the 12 point drop in the
company's stock to 37-1/4 was largely expected in light of the
speculative nature of the biotechnology companies whose
fortunes often depend on the success of an important drug.
    "In larger pharmaceutical companies each product does not
have as much overall significance. But this is very important
to Genentech," said Robert Riley, a senior consultant at Arthur
D. Little Inc.
    Some estimated that Genentech could see as much as 1.5
billion dlrs from the drug. But with each delay, others can
enter the market and catch up to Genentech's lead.

    Industry sources pointed out that KabiVitrum, in an
alliance with Hoechst AG <HFAG.F>, won a recommendation for its
streptokinase drug on the same day Genentech's application was
delayed. Streptokinase, an enzyme-based drug, is also used to
treat heart attack victims.
    In addition, Milstein said that Beecham Group Plc <BHAM.L>
has a drug called Eminase which is "the most likely competitor
to TPA," and from a clinical standpoint, nearly identical.
Beecham's drug has been approved for use in Germany and is
awaiting approval in the U.K., he added.
     Streptokinase was difficult to administer to heart attack
victims because it would dissolve before it reached the heart.
Another method, which involved pumping the drug directly into
the heart through a tube, proved difficult when a heart attack
was in progress. TPA was seen as a savior since it was easier
to administer and worked quickly.
    But new developments have made streptokinase more effective
and easier to administer, becoming a potential threat to
Genentech's grasp on the TPA market. And if that wasn't enough,
about 30 other biotech companies are quickly developing TPA in
Genentech's path.
 
    "Genentech's advantage is being first in the market," said
industry consultant Scott King, formerly an analyst with
Montgomery Securities in San Francisco. "They'll be the first
approved but then they'll face competition after one or two
years."
    The company may also face patent pressures for its drug. It
is currently about to go to court with Beecham Group in the
U.K. in a patent dispute. And while its patent is pending in
the U.S., many analysts expect the company to face some suits
as soon as the patent is issued, a potentially more harmful
situation than any temporary setback in the FDA.
 Reuter
