Genentech Calls Approval by FDA of Heart Drug Biotech ‘Endorsement’
Genentech took a giant leap toward achieving its goal of becoming a major pharmaceuticals company Friday when the U.S. Food and Drug Administration, as expected, approved the sale of TPA, a genetically engineered drug that helps open clogged arteries in heart attack victims.
“This represents the ultimate endorsement of biotechnology and recombinant DNA technology,” exulted G. Kirk Raab, Genentech’s president, in an interview. Analysts predict that TPA, which will be sold under the trade name Activase as an emergency treatment for heart attack patients, could ring up annual sales of between $500 million to $1 billion.
Raab defended the anticipated price of up to $2,500 per dose, citing TPA’s lifesaving potential and Genentech’s $200-million-plus investment in research, testing and production facilities.
The company celebrated its achievement with a huge fireworks display at its headquarters in South San Francisco on Friday night, and it will unleash a marketing blitz aimed at cardiologists at the American Heart Assn.’s annual convention starting this weekend in Anaheim.
In Washington, FDA Commissioner Frank Young hailed the new drug as a “major advance” in the treatment of heart attacks, which strike 1.25 million in the United States annually.
“TPA had been shown to dissolve clots in about 70% of patients when it is injected within six hours of the onset of symptoms--with improved heart function demonstrated if administered within four hours,” Young said.
The drug works by dissolving clots and restoring the flow of oxygen-rich blood to the heart, reducing the likelihood of permanent damage after heart attacks. “I am enthusiastic about TPA in particular because in preventing damage to the heart muscle, it can save the quality of life,” Young said.
Young said he was “enthusiastic” about the prospects for future products to be derived from genetic engineering. “Biotechnology, regulated carefully, has produced no freaks, no Frankenstein monsters and no runaway germs,” the FDA commissioner said.
It has, however, produced runaway profits for early investors in Genentech’s stock. The company sold stock to the public in October, 1980, at a price, adjusted for subsequent stock splits, of $5.83 a share.
Analysts Divided
Genentech closed Friday at $42.50, down 25 cents, as traders took profits after an anticipatory run-up in the stock price earlier this week.
Securities analysts are divided about the prospects for the company’s stock--mirroring, in some ways, divisions in the medical community about the usefulness of Genentech’s new drug.
“We’re off to the races,” said David H. MacCallum, a managing director of Hambrecht & Quist, the San Francisco investment firm that managed Genentech’s initial stock offering in 1980.
“Genentech is way out in front” in making the transition from a research concern to one that makes products--and substantial products. “I don’t think there are any other biotech companies that are close,” he added.
M. Kathleen Behrens, biotechnology analyst at Robertson Colman & Stephens, added that, after years of expectations, “this proves that Genentech, and the biotechnology industry, are for real.”
Still, Denise Gilbert, biotechnology analyst with Montgomery Securities, sounded a note of caution. “Now that the major event has taken place, Genentech will trade based on its sales and earnings.”
She said the price is too high based on anticipated earnings, which will be held down by existing and potential competition from other heart drugs.
Times Staff Writer Marlene Cimons in Washington contributed to this story.
