Millennium's New Drug
By Jeff Fischer (TMF Jeff)
May 14, 2003
A hopeful cancer drug at Millennium Pharmaceuticals (Nasdaq: MLNM) has become the real deal, gaining approval from the Food and Drug Administration for treatment of multiple myeloma, a rare blood cancer that affects 45,000 Americans, with 15,000 new cases annually.
The stock is jumping partly because the approval came earlier than expected, so Millennium will book more sales on the drug -- called Velcade -- this year than ever estimated. Secondly, Velcade is in dozens of trials for various forms of cancer, with hopes that it will become a novel treatment for solid tumor cancers as well. Early results from ongoing trials will be available by June 3.
The news offers additional hope because Velcade is a novel form of treatment, called a proteasome inhibitor, that offers another way beyond chemotherapy to fight cancer. By inhibiting a cell's proteasome function, Velcade is meant to stop cell division, thereby killing a cancer cell.
Market approval has been granted for multiple myeloma patients who have failed at least two previous therapies. In phase II studies, 27.7% of late-stage cancer patients responded to Velcade, and 17.6% experienced clinical remission. Despite early market approval, Velcade's phase III trials will continue and clinical benefits will need to be reported.
Millennium's revenue could near $500 million in 2003, with under 10% of that possibly being Velcade. Sales of the drug will likely peak at around $200 million annually without further approvals for other cancers. Celgene (Nasdaq: CELG) and Genta (Nasdaq: GNTA) have competing drugs in trials.
Management said it took four and a half years after Velcade's first human dosage for it to become a commercial drug, which compares well to the eight to nine years required for the average cancer drug. Although Velcade was discovered conventionally, it was developed with some help from genomics, supporting the hope that genomics will lead to a more efficient drug development process. Millennium has more than a dozen products in clinical trials and has modeled a breakeven financial performance in 2006.
Jeff Fischer has a stake in Millennium.
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