GelTex Pharmaceuticals has high hopes for dialysis drug - ZoneCours

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GelTex Pharmaceuticals has high hopes for
dialysis drug

Boston Business Journal
-

November 28, 1997

by
Tom Salemi

Journal Staff

W
ALTHAM
--
Even at 33,000 pages,
GelTex Pharmaceuticals Inc.
's first new drug application filed to
the U.S. Food and Drug Administration earlier this
month is a "relatively small NDA," according to
Mark Skaletsky, GelTex's president and chief executive.

However, the document for the company's lead product, RenaGel, a polymer
-
based pill designed to
lower high phosphorus counts in the blood of dialysis p
atients, represents a huge leap for the
Waltham
-
based firm, which hit a few high notes this year.

The company's stock traded at $28.19 earlier this week, nearly double its 52
-
week low of $15.75
nearly a year ago on Dec. 6 and just a notch below the 52
-
wee
k high of $32 on Oct. 15, just before the
stock market dip.

The company's quarterly revenue shot up considerably although nearly all of it, $2.8 million, came in
the form of reimbursement from Genzyme General of Cambridge, which has a 50/50 cost/sales spl
it
deal with GelTex.

For the quarter ended Sept. 30, GelTex reported a net loss of $5.5 million, or 40 cents per share, on
revenue of $2.9 million, compared with a net loss of $5.3 million, or 40 cents per share, on revenue of
$225,000 for the same quarte
r the previous year.

RenaGel shows promise to help GelTex cut its losses.

Joyce Lonergan, an analyst for Cowen & Co. in Boston, predicts a 1999 launch for RenaGel,
confirming Skaletsky's projection. That will be the same year GelTex and Genzyme plan to m
ove
toward filing for approval in Europe and Canada.

According to Skaletsky, RenaGel will bond with phosphorous molecules in a dialysis patient's blood
and pass them through the patient's system.

High phosphorus counts cause the body to compensate by dra
wing calcium from the bones and into
the blood.

Doctors now make up the deficiency by prescribing calcium, but that can cause calcification and
blocked arteries, Skaletsky said, adding that other treatments bring side effects that RenaGel won't
because it

isn't absorbed by the body.

Lonergan projects a $300 million market for RenaGel, with sales growing from $30 million to $340
million in 2002.

The company is also examining the possibility of prescribing RenaGel to patients with kidney
problems as a meth
od of delaying dialysis.

The option would open a lot of doors for RenaGel since 220,000 people in the country undergo
dialysis while up to 800,000 are in the "pre
-
dialysis" stage.

FDA Approves Renagel Capsules For Patients With End Stage Renal
Disease


W
ALTHAM, MA and CAMBRIDGE, MA
--

Nov. 2, 1998
--

The United States Food and
Drug Administration has approved GelTex Pharmaceuticals, Inc.’s and Genzyme
General’s Renagel(R) Capsules (sevelamer hydrochloride) for the reduction of serum
phosphorus in patients

with end stage renal disease (ESRD).

The safety and efficacy of Renagel Capsules in ESRD patients who are not on
hemodialysis have not been studied. Control of blood phosphorus is an integral part of
managing the care of ESRD patients. There are an estima
ted 220,000 ESRD patients
on dialysis in the U.S.

GelTex Pharmaceuticals trying to end year on
good note

Boston Business Journal
-

December 17, 1999

by
Ted Griffith

For investors in Waltham
-
based
GelTex Pharmaceuticals Inc.
, 1999 has been a disappointing year.
But earlier t
his month, GelTex chief executive Mark Skaletsky tried to give shareholders cause for
optimism about the future.

Skaletsky told Bloomberg Business News that he expected sales of the company's first drug,
Renagel
,
to exceed expectations in the fourth quarter. Renagel, which is used to treat patients with kidney
disease, will generate $7 million to $8 million in revenue in the fourth quarter, Skaletsky said.
Renagel had bee
n expected to generate between $5 million to $6 million in the final quarter of the
year.

The recent piece of good news about the fourth
-
quarter sales was a welcome change for GelTex. The
company has seen its stock slide about 60 percent from its peak of
$29 reached on Jan. 21. The stock
closed Friday at $11.37.

Wall Street has soured on GelTex apparently because sales of Renagel have not been as brisk as
expected. For the first nine months of the year, GelTex reported total revenue of just $6.2 million a
nd
a net loss of $26.6 million. When Renagel was first approved by the U.S. Food and Drug
Administration about a year ago, investors had high hopes for the drug. Some industry analysts
estimated sales of Renagel for the year would be about $30 million.

Ge
lTex, however, has not found rapid acceptance in the market.

One reason is that the condition that Renagel treats is not always a top priority for physicians, said
William Tanner, an industry analyst in the Boston office of SG Cowen Securities. Renagel ca
n be used
to control the level of phosphorus in the blood of patients with end
-
stage kidney disease. With
patients that have severe kidney disease, however, there are health problems that may take
precedence over phosphorous blood levels, anemia being one
example.

Tanner said GelTex may also face competition from other products for the same condition treated by
Renagel.

"The question for Renagel is: Are we just seeing a slow uptake in the market or were the initial sales
estimates too robust," Tanner said
. "There are a lot of questions facing the company."

Tanner said that it does not appear that GelTex will be able to quickly improve lagging sales of
Renagel. S.G. Cowen Securities has cut its rating on GelTex from a "strong buy" to a "buy."

"The trend i
sn't going to change anytime soon," Tanner said of sales of Renagel. "It could improve on
a relative basis, but not on an absolute basis."

FDA Approves Renagel Tablets (Sevelamer Hydrochloride) For
Hemodialysis Patients


CAMBRIDGE and WALTHAM, MA
--

July
13, 2000
--

Genzyme General and GelTex
Pharmaceuticals Inc. announced that the U.S. Food and Drug Administration (FDA) has
granted marketing approval for Renagel® Tablets (sevelamer hydrochloride) in 800 mg
and 400 mg dosages for the reduction of serum pho
sphorus in hemodialysis patients
with end
-
stage renal disease.

Renagel is currently available in a 403 mg capsule form. The new tablet formulation of
Renagel will provide physicians with two new dosing options to more easily manage
patients into the normal

serum phosphorus range. The 400 mg tablet is much smaller
than the current capsule, while the 800 mg tablet can be used by physicians to manage
patients who may need higher dosages but have been reluctant to take the required
number of pills.

"The introdu
ction of Renagel Capsules twenty months ago represented a significant
advance in the control of serum phosphorus for the dialysis patient population," said
Christi van Heek, president of Genzyme General's therapeutics business. "The
introduction of a new t
ablet formulation of Renagel continues Genzyme's commitment to
improving the treatment of end
-
stage renal disease."

Mark Skaletsky, chairman and chief executive officer of GelTex Pharmaceuticals, said:
"We are pleased to be able to bring this new form of o
ur effective phosphate binder to
physicians to help their dialysis patients. We expect a rapid adoption of these tablets
when they become available to physicians later this year."

Patients on dialysis are at high risk of having dangerously elevated phospho
rus and
calcium levels. If left untreated, elevated blood phosphorus levels can lead to a number
of serious conditions, including cardiac and other soft tissue calcifications, renal bone
disease, and death.

Renagel, marketed by Genzyme under a joint ventu
re with GelTex, is designed to bind
and remove dietary phosphorus in the gastrointestinal tract and eliminate phosphorus
through normal digestive processes. One of the major benefits of Renagel is that it does
not contain calcium.

The number of patients u
ndergoing dialysis for end
-
stage renal disease is estimated to
be 280,000 in the United States and 170,000 in Europe.
These numbers are increasing
by 7
-
8 percent annually.

Renagel was introduced in the United States in late 1998, and is also available in
Europe, Canada, and Israel. Genzyme filed for European marketing approval of Renagel
Tablets during the first quarter of this year and expects to file in Canada during the third
quarter of this year.

Genzyme to buy GelTex for $900 million

Boston Business J
ournal
-

September 15, 2000

Cambridge
-
based
Genzyme Corp.

agreed to buy
GelTex Pharmaceuticals Inc.

for about $900 million
in cash and stock, gaining control of a dialysis drug and expanding its development and product lines.
GelTex shareholders will receive 0.7272 share of Genzyme's general unit stock or $41
.95 in cash for
each GelTex share, with the cash portion limited to $500 million. The purchase will give Genzyme
full ownership of
Renagel
, a dialysis treatment it market
s with Waltham
-
based GelTex. Renagel had
1999 U.S. sales of $19.5 million, and Genzyme expects sales to reach $45 million this year. Genzyme
also gains GelTex's WelChol, a cholesterol
-
lowering drug.

Genzyme raises 2001 forecast for Renagel
sales for secon
d time

Boston Business Journal
-

May 4, 2001

Cambridge
-
based
Genzyme Corp.
's general division raised sales estimates for its Renagel dialysis
treatment for the sec
ond time this year.

Genzyme said it expects $130 million to $140 million in 2001 sales of the drug, up from the $120
million to $130 million estimate the company gave last February. The company said it's raising its
Renagel sales forecast because of incre
ased prescriptions in the United States and Europe.

Sales of Renagel, Genzyme's fastest
-
growing drug, more than tripled during the first quarter to $28.6
million. The drug is used to control phosphorus levels that can lead to complications in kidney
-
dialy
sis patients.


Genzyme cuts forecast on slowing sales of
Renagel

Boston Business Journal
-

September 16, 2002

Cambridge
-
based
Genzyme Corp.

cut profit estimates f
or the third time this year because of declining
sales of the biotechnology company's second
-
largest drug,
Renagel
, for kidney dialysis patients,
according to Bloomberg B
usiness News.

Earnings excluding amortization and other costs will be between $1.08 and $1.11 a share this year
instead of the previously forecast $1.18 to $1.23, Genzyme said.

Renagel sales will fall as much as 12
percent, the company said.

Sales of Ren
agel, once Genzyme's fastest
-
growing product, slowed this year after prescriptions failed
to meet expectations and wholesalers cut inventories.

Early this year, Genzyme had forecast Renagel revenue of as much as $280 million, anticipating the
drug's intro
duction in Europe and Brazil. The company in June cut that forecast to between $200
million and $210 million, causing its shares to fall 24 percent in a day. Sales in Brazil have slowed
because of delays in implementing a state reimbursement system, Genzym
e said.

Now, the company expects Renagel sales of between $155 million and $165 million, down from $177
million in 2001.

Genzyme's Renagel Tale Is a Tragedy of Errors


By
Adam Feuerstein

Senior Writer

06/20/2002 04:35 PM EDT

How to Destroy Your Company's Wall Street Credibility and Erase $8 Billion in Shareholder
Value, All in Six Months
: It could be the title of a primer by
Ge
nzyme

(
GENZ
:Nasdaq
-

news

-

commentary

-

research

-

analysis)
.

Shares of the troubled biotech fir
m are off 24% Thursday after company management issued yet
another sales and earnings
warning

Wednesday night. At its current price, $19.64, Genzyme has
now lost 65% of its market v
alue since the beginning of the year. Worse yet, several Wall Street
analysts don't even believe the company's revised numbers, and that means investors could be
slapped with yet more warnings in the future.

The Amex Biotechnology Index was off 5% Thursda
y, as investors used Genzyme as another
excuse to run quickly from the sector.

How did Genzyme find itself in such a mess? Unfortunately, it was all too easy:

Step 1: Start the year with an extremely
bullish forecast
, particularly for your highest
-
profile
drug. Renagel sales: $260 million to $280 million in 2002, or 58% year
-
over
-
year growth.
Earnings: 25% growth in 2002. When fund managers question the assumptions, insist they're
wrong.

Step 2: A few months later, issue a first
-
quarter
profit warning
. Blame lower
-
than
-
expected first
-
quarter Renagel sales, due to reductions in wholesaler inventory levels. As
sure investors that full
-
year targets for Renagel sales and earnings are still on track.

Step 3: Actually report first
-
quarter results, but
miss

reduced Wall Street expectations.
R
eiterate,
again, full
-
year forecasts.

Step 4, which brings us to the present: Wednesday night, Genzyme issued its second sales and
earnings warning, admitting that, yes, its Renagel sales forecasts were wrong. Forget the 58%
year
-
over
-
year sales growth fo
r drug, now it will be more like 18% growth. Likewise, the
expected 25% earnings growth forecast for the year is now cut to 5% growth, at best.

On a conference all Wednesday night, Genzyme executives, including CEO Henri Termeer, were
apologetic, blaming
the previous guidance on inflated demand forecasts that resulted from a
faulty analysis of third
-
party prescription data. Now, after sitting down with doctors and the
company's salespeople, they've come up with a more realistic forecast for Renagel sales g
rowth
this year
--

between $200 million and $210 million, the company said.

But with reserves in the Genzyme credibility reservoir at dangerously low levels, many analysts
weren't ready Thursday to take the company at its word.

Bear Stearns biotech analy
st Ronald Renaud lowered his 2002 Renagel forecast to $181 million
from $245 million, and earnings to $1.13 per share from $1.32 per share. (Genzyme now says it
expects 2002 earnings of $1.18 to $1.23 per share.) Renaud rates Genzyme neutral, and his firm
doesn't have a banking relationship with the company.

One of the big question marks remaining is just how well Genzyme is working through its
previously announced Renagel inventory reduction plan. After the first quarter, the company said
wholesalers had
reduced inventory levels from a bloated 12 weeks to a more manageable six
weeks. But Wednesday, Genzyme executives admitted that wholesaler inventories were still at
nine weeks and wouldn't be reduced to six weeks until the end of the year.

In late May, S
G Cowen's Yaron Werber was one of the first biotech analysts to question the
accuracy of Genzyme's inventory level guidance. Thursday, he said his independent checks
suggest Renagel's inventory level still stands at just under 11 weeks, raising the risk th
at
Genzyme's current forecast is still risky. Werber reduced his Renagel sales estimate to $190
million in 2002 and his earnings estimate to $1.17 per share. He rates the stock buy, and his firm
doesn't have a banking relationship with the company.

Lehman

Brothers biotech analyst Joe Dougherty also took down his Genzyme estimates on
concerns about the company's ability to provide reliable forecasts.

"We believe that there is still some uncertainty surrounding Genzyme's growth rate going
forward. Inventory

adjustments and underlying demand in the Renagel market are still poorly
visible, as is the degree of penetration," he writes. Dougherty has a buy rating on Genzyme, and
his firm has a banking relationship with the company.

Genzyme said Wednesday that it

expects to post $40 million in Renagel sales in the current
quarter. When you add that figure to the $29.5 million in first
-
quarter sales, Genzyme clearly has
some ground to make up if it expects to hit its reduced Renagel sales targets.

Renagel is used
by patients undergoing kidney dialysis. Genzyme believes that new medical
guidelines for the treatment of these patients, to be released later this summer and published
officially early next year, will favor Renagel use and help reaccelerate the drug's gro
wth over the
next six months.

SG Cowen's Werber isn't too sure. "We have recently talked with a prominent physician with
intimate knowledge of the K/DOQI (kidney dialysis outcome quality initiatives) guidelines who
expressed the notion that the guidelines

are unlikely to catalyze Renagel growth," he writes. "Our
consultant noted that since Genzyme has done a tremendous job marketing Renagel to
physicians, the attributes and benefits of Renagel are widely known and have largely been
adopted into clinical pr
actice at this point."

Renagel
-

A strong foundation for growth


http://www.genzyme.com/corp/2004_AR/strong_foundation_for_growth.asp


Renagel is growing significantly a
round the world foundation in the United States,
Europe, and Japan. With more than 1.2 million people around the globe undergoing
need and the prospects are both substantial.


Our therapy for controlling phosphorus levels in kidney dialysis patients witho
ut the use of calcium or
metal, Renagel commands about half the U.S. market in the treatment of end
-
stage renal disease.
Opportunities for continued growth are increasing as more physicians recognize its unique combination of
benefits and more countries ap
prove it. In 2004, Renagel revenue increased 29 percent, and
approximately 300,000 patients in 45 countries now benefit from this product. Outside the United States, it
performed particularly well in Europe and Canada. Renagel is established in Brazil, and

with its
anticipated 2005 launch in Colombia and filings in Peru, Argentina, and Mexico, we look forward to
significant growth in Latin America. Renagel's contribution to Genzyme's gross margin has increased as a
result of our investments in new facilitie
s in Europe.


GENZ

Genzyme Corporation

(NASDAQ NM)

67.55


3:05
PM ET 3/27/06




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