Corante

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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: derekb.lowe@gmail.com Twitter: Dereklowe

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April 29, 2004

Yahoots

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Posted by Derek

The real news on the cancer front is in the post below, but I have a few other things to take care of tonight, too. Yesterday's post on Imclone's stock price was not well-received over on the IMCL message boards on Yahoo, where I've picked up several of the usual responses. They include the standard-issue Dark Suspicions that I'm one of the Evil Stock Bashers trying to scare The Little Guys into parting with their beloved Imclone, presumably so my top-hatted overseers can scoop it up for a song.

Well, folks, the guy with the top hat who was scooping up Imclone when it was cheap is Carl Icahn, more power to him. I don't work for him, sad to say. He bought the majority of his stake, several million shares worth, below $20, and he's for damn sure not buying in at $70 a share - in fact, he's probably selling his shares to you.

On a slightly higher plane, one comment sums up several others that I've received:

"These guys are clueless. (Erbitux) works against a growth factor common in numerous cancers. What they do not comprehend is the fact that if it works against one, it works against many; and if it works late stage, it works early and middle stage too. They value Erbitux based only on its approval, as if it will never receive any other indication approvals. Like I said, clueless."

I'd like to point out to this fellow and the other Yahoots that, unfortunately for this argument, I do drug research for a living. Blogging most certainly does not pay my bills; Big Pharma does. And among the therapeutic areas I work in is cancer, giving me a reasonable familiarity with the field. I can state, then, with some assurance, that the commentator above is full of fertilizer.

Yes, the epidermal growth factor receptor is indeed common in many cancers. But its importance varies widely in different tumor lines, and widely among different strains of what superficially appear to be the same kind of tumor. The same goes for all the other cancer targets you can name. A more accurate restatement of the above person's doctrine would be: If it works against one, it might work against some others. Or it might not.

We're only beginning to figure out the details, and - this is important - they're not going to increase Erbitux's market share when we do. Read the next post below for more on this. Erbitux will pick up some off-label sales, sure, but it's not going to end up with a long list of approved indications that will push it into the stratosphere.

And why not? Well, don't let those shimmering waves of greed blind you to the facts: in their clinical trials, Imclone, BMS, and Merck-Darmstadt carefully picked the tumor types that would be expected to give the most robust response. That's how you get a drug approved, by going to the agencies with the best data you can get. Erbitux has already been tested in the areas where it's likely to gain the most market share and make the most profit.

And there are plenty more drugs breathing down its neck. Go on and hold that IMCL, guys, go ahead and mortgage the house to buy some more. Maybe you'll watch it go to $150; stupider things have happened. But I think that the odds are that you're going to wish you'd taken your profits in 2004.

Comments (4) + TrackBacks (0) | Category: Business and Markets | Cancer


COMMENTS

1. David on April 30, 2004 2:18 PM writes...

The problem with the Yahoo guys, like a lot of "little investors" is just what you pointed out. They're momentum investors who noticed in the past 6 months that, gee, biotech's done well..Let's buy! They extrapolate earnings/sales etc from one approval for some segment of the cancer market into dozens of off-label uses, multiple cancers etc.

They need to wake up and see that THERE IS NO MAGIC BULLET FOR CANCER. Not only isn't there one, there will likely NEVER BE one. The best case scenario for cancer is that it will become a chronic, manageable disease like HIV is rapidly becoming--you will suffer some debilitations, but overall, you can live with it for a dozen years or more. You will be taking drug cocktails, need constant medical monitoring, etc.

Anyhow, people assume that Erbitux (and Tarceva) will cure everything, when in fact, it will only work on 10-20% of specific cancers. They need to adjust their revenue projections accordingly. When they do, they might just realize that their company is not work $5 billion or $50 billion or whatever they bought in at.

David

Permalink to Comment

2. Dennis on May 2, 2004 8:16 AM writes...

Any comments about PI-88 Progen Ind. Drug

Permalink to Comment

3. Busterbuckeye on May 12, 2004 11:18 PM writes...

Dear Mr. Corante:
I posted in response to your April 28 blog in which you quoted Travers with approval. Travers did indeed estimate Erbitux revenues at "peak"
based solely on its one current crc indication.
Your own April 29 response admits at least the possibility of other indications. After careful thought and perhaps after this coming ASCO, I invite you to reconsider adopting Travers'"peak"
revenue estimates, and perhaps one of us my dine on crow.

Permalink to Comment

4. Busterbuckeye on June 5, 2004 5:54 PM writes...

Ahem.
And how does Mr. Lowe prefer his crow?

Permalink to Comment


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