Millennium Pharmaceuticals: a key victory! - 500 Beiträge pro Seite

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MLNM: A Key Victory

MLNM gets a lot of talk around here. I think of it as the poster child for biotech. It`s one of the largest drug discovery companies out there, and a real pioneer of the high-throughput, networked, new economy medical business. But there`s been a chink in Millennium`s armor - they`ve had no drug of their own. Sure, they`ve delivered countless targets to their network of customers, but there are no labels on their internal pipeline chart that say "in market."

This week was a real moment of truth for the company. Its most advanced treatment, a monoclonal antibody called CAMPATH, was up for review by the FDA. It passed the test. But it`s important for investors to understand why this was important.

It wasn`t important to the bottom line. CAMPATH is subject to accelerated review precisely because it`s not a blockbuster - it`s an orphan drug. The FDA grants orphan status when a drug is in the pipeline for rare or difficult to treat conditions. In this case that condition is a particularly treatment resistant form of Leukemia. Sales for this indication are expected to be small, perhaps under $100 million, and due to the number of fingers in the pot, Millennium`s actual profit share will be de minimus.

It also wasn`t marketing approval. This approval does not send CAMPATH into the streets, but it does make it extraordinarily likely that marketing approval is in the offing. Barring some monstrous disaster in Phase III trials, CAMPATH is about as close to a sure thing in biotech as you can get without actually being done.

But it was proof of Millennium`s trials process. Very few of the small companies (compared to big pharma) capitalizing on the genomics revolution have played the FDA game through to completion, and the same panel that approved CAMPATH sent Millennium colleague Maxim Pharma back to the drawing board.

It was a key win for the technology. While CAMPATH sales may be small for this indication, the treatment is also in testing for a host of other cancer indications. Success in these other indications would create leverage in the product portfolio, and potentially lead to meaningful revenues. But even putting CAMPATH aside, it`s a win for monoclonal antibody (MAB) treatment. MABs are a key vector for taking advantage of the treasure trove of info coming from the Genomics revolution, and are some of the most exciting products in the global biotech pipeline. Every win for a MAB is a positive sign.

That`s why this is important. That`s why this was a key biotech victory.

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Robertson Stephens: MLNM strong buy


Millennium Pharmaceuticals, Inc.

(NASDAQ:MLNM) ($60.13)

Strong Buy

Michael King, Biopharmaceuticals

"Yesterday, the Oncology Drug Advisory Committee (ODAC) recommended approval of MLNM`s CAMPATH for the treatment of refractory chronic lymphocytic leukemia (CLL) to the FDA by a 14-to-1 vote," said King. "MLNM plans to co-promote the compound with Ilex Pharmaceuticals. While CAMPATH will still require final approval from the FDA, the agency generally follows the recommendations of ODAC. We believe the label will read that the drug is approved for CLL patients refractory to treatment with alkylating agents and fludarabine, the current standards of care. CAMPATH is scheduled to gain accelerated approval, meaning the FDA will require confirmatory post-approval studies. The FDA, the panel, and the company were unable to agree on the design of this critical study during the meeting. This may delay final FDA approval by a couple of weeks into early 2001 as this issue is resolved. However, we remain comfortable with our estimate for 1Q:01 market launch. We estimate peak CAMPATH sales to be around $150 million, and MLNM only receives 1/3 of net profits. Therefore, we expect CAMPATH will have little impact on MLNM`s top or bottom line. Nonetheless, we view the approval as a major psychological milestone for the company as CAMPATH is the Millennium`s first drug approval. We still believe the vast majority of MLNM`s valuation lies in the breadth and depth of its clinical pipeline and power of its genomics discovery engine.We expect Millennium to have a slew of positive announcements into the new year, including potential M&A activity and advancement of additionalcompounds into the clinic. We reiterate our Strong Buy rating."

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Diese "Strong Buy" Empfehlung von Robertson Stephens gilt in diesem Zusammenhang übrigens auch für Ilex Oncology (WKN 907545).
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