Idec Shares Tumble Again on Downgrade

Shares of Idec Pharmaceuticals Corp. fell again Tuesday after an analyst downgraded the biotechnology firm because of concerns about slowing drug sales.

Idec dropped 9% to close at $32.84, off $3.40 a share, on Nasdaq after Merrill Lynch analyst Eric Ende lowered his rating on the San Diego company to “neutral” from “buy.” Ende cited slowing sales of Idec’s lead drug, Rituxan, and limited adoption of its only other drug, Zevalin.

Idec’s stock fell Monday after two analysts slashed their sales projections for Zevalin.

The medications are used to treat non-Hodgkin’s lymphoma, a type of cancer. Rituxan sales are expected to slow because the antibody drug already is widely used to treat the disease. Zevalin is a radiopharmaceutical -- an antibody with a radioactive payload -- that is complicated to use.

Ende said he remained convinced that Zevalin would become a successful product. But he said its use has been limited because it requires coordination between oncologists, who typically treat lymphoma patients, and hospital-based nuclear medicine departments.

In addition, he said, physicians are uncertain about when to use Zevalin because, unlike Rituxan, it has significant side effects.

Patients who took Zevalin in clinical trials had fewer infection-fighting white blood cells and platelets, which control bleeding.

Ende also said doctors are unsure whether they should administer Zevalin instead of Rituxan, or wait until patients have no other treatment options.

Idec has been one of the biotechnology industry’s successes. Sales of Rituxan, which Idec co-markets with Genentech Inc., should reach $1 billion this year.

However, Ende cut his Zevalin sales estimate for 2003 to $59 million, from $79 million, and reduced his 2004 Zevalin forecast to $104 million from $140 million.

An Idec spokesman couldn’t be reached for comment.