EntreMed sells thalidomide rights Celgene to conduct trials on drug in treatment of cancer

Pharmaceuticals

December 11, 1998|By Mark Guidera | Mark Guidera,SUN STAFF Bloomberg News contributed to this article.

Rockville-based EntreMed Inc. said yesterday that it has transferred its rights to the controversial drug thalidomide, a potential treatment for cancer, to Celgene Corp. of Warren, N.J.

The agreement also calls for Celgene to take on the responsibility and cost of human clinical trials of thalidomide.

The drug has shown promise in preventing tumors from developing blood vessels needed for growth.

Under the agreement, Celgene will immediately begin paying EntreMed an undisclosed percentage of royalties on sales of the drug.

In July, Celgene became the first U.S. company to get government approval to market thalidomide. The drug, used as a sedative, was banned in Europe in 1963 after causing birth defects in thousands of newborns. Celgene has approval to market the tightly regulated drug to treat leprosy in patients who have not responded to conventional courses of treatment.

Analysts said the agreement clears the table of any potential patent disputes between the two companies and would help EntreMed focus on development of its two experimental protein-based drugs for cancer.

Jerry Treppel, a biotechnology analyst with Warburg Dillon Reed Inc., said he did not think the thalidomide royalty stream to EntreMed, which booked a net loss of $8.9 million for the first nine months of this year, would make the company profitable.

Treppel estimated that sales of the drug, excluding the leprosy market, would be about $65 million in 2000.

But EntreMed's chief executive officer, John Holaday, said the agreement would provide an important revenue source to help pay for planned human clinical trials of endostatin, an experimental protein-based drug that EntreMed says shrunk tumors in experiments with mice.

The company's revenue currently comes from payments due under research agreements with Bristol-Myers Squibb Co. and the National Cancer Institute. EntreMed had $3.7 million in revenue for the first nine months of the year.

The company plans to launch safety trials of endostatin next year.

NTC In the meantime, National Cancer Institute investigators are attempting to determine why their experiments with the drug did not yield the dramatic results seen by M. Judah Folkman of Children's Hospital in Boston.

Folkman discovered the protein and along with the hospital licensed rights to it to EntreMed. EntreMed shares closed yesterday at $24.875, down 12.5 cents. Celgene shares gained $1.0625 to close at $11.6875.

Pub Date: 12/11/98

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