Genentech Stops TPA Production Until ’89

Biotechnology pioneer Genentech Inc., reeling from slower-than-expected demand for its ballyhooed heart attack drug, has halted production of the substance for the rest of the year.

“Genentech ran its manufacturing plant at a rate considerably higher than sales,” explained Frederick M. Hoar, a spokesman for the South San Francisco-based company. “The company is currently maintaining adequate stock of TPA . . . and has suspended production. We’ve satisfied our inventory goals for 1988.”

Hoar declined to say when the company would resume producing TPA or how much TPA Genentech has on hand.

Analysts estimated that the company, which stopped making TPA earlier this month, has a three months’ supply of the substance on hand. Currently, it is manufacturing other pharmaceuticals, including CD4, a drug now in clinical tests to determine its usefulness in treating AIDS.

TPA--a thrombolytic, or clot-dissolving substance, derived from genetic engineering--has been touted as the first blockbuster drug from the biotechnology industry. And with sales of $180 million still expected for its first year on the market, it appears to be the top-selling first-year drug ever. But TPA’s high cost, at $2,200 per dose, and competition from a cheaper drug, Streptokinase, have held sales far below the high-flying expectations Wall Street once had.

Although analysts said about half of the potential market might be captured by Streptokinase, analysts thought TPA would capture much of the rest of the estimated $1-billion-a-year market for thrombolytic drugs. Genentech had spent five years and $200 million to develop TPA, aiming to treat many of the approximately 600,000 heart attack patients in the United States that could benefit from anti-clotting heart drugs.

Genentech’s rising stockpiles of TPA have proven an expensive burden.

“They had been stockpiling TPA even before they got FDA approval,” said S. Rober Kupor, a biotechnology analyst with Cable Howse & Ragen in Seattle, Wash. “They’ve got to have a ton of the stuff on hand. Everyone knows that sales of TPA have been far below what we (analysts) and the company had predicted.”

Genentech’s stock has been sliding for months from a high of $51.25, and it recently hit a 52-week low of $16.125. On Thursday, in over-the-counter trading, Genentech closed down $1 at $16.75.

“Genentech is the only biotechnology company that is generating sales and profits from real pharmaceutical products,” said Eugene Melnitchenko, a pharmaceutical analyst with the brokerage firm Eppler, Guerin & Turner Inc. in Dallas. “It’s the IBM of its field. But it’s potential won’t be realized until the 1990s.”

Meanwhile, Melnitchenko said, TPA “is still going to be a blockbuster drug that generates more than $100 million in annual sales.”