Published: November 20, 2011
Yet for all that, Regeneron Pharmaceuticals has known mostly failure in nearly 24 years of existence, piling up cumulative losses of $1.2 billion.
But that is now changing. Late Friday, the company won approval from the Food and Drug Administration for what is expected to be its first big drug ”” to treat the wet form of age-related macular degeneration, a leading cause of severe vision loss in the elderly.
The drug, called Eylea, can be injected into the eye less frequently than the current standard, Genentech’s Lucentis, according to the labels of the two drugs.
Eylea is also slightly less expensive, at $1,850 an injection versus $1,950 for Lucentis. Regeneron argues that Eylea would save the health care system thousands of dollars a year per patient, factoring in the fewer injections and also fewer doctor visits and examinations.
Eylea, however, is still more expensive that Avastin, a Genentech cancer drug that costs only $50 a dose when used off-label to treat macular degeneration. Avastin accounts for more than half the macular degeneration market, despite some recent contamination incidents that have raised safety concerns.
The approval is a vindication for Dr. Leonard S. Schleifer, 59, who has been chief executive since founding Regeneron in early 1988, making him almost certainly the longest-reigning chief executive in the biotechnology industry.
Dr. Schleifer, who has a medical degree and doctorate in pharmacology, said the company’s top priority is science.
“We thought that good science would win out a little earlier, but we are patient,” he said in an interview Sunday.
Regeneron is not the only company to eat up decades and billions of dollars. Both Vertex Pharmaceuticals, founded in 1989, and Human Genome Sciences, started in 1992, won approvals for their first big drugs only this year, for hepatitis C and lupus, respectively.
Regeneron first focused on nerve growth factors to treat neurological illnesses like Lou Gehrig’s disease. Those did not work. But one of the drugs seemed to make people lose weight, so the company then tested it as an obesity treatment. That failed as well, in 2003.
Still, the company had other projects to fall back on. And Dr. Schleifer remained in office, helped by his ownership of founder’s stock carrying 10 votes per share.
Regeneron won approval for its first drug in 2008, but for an extremely rare disease, cryopyrin-associated periodic syndromes. Sales of the drug, Arcalyst, were only $14.9 million in the first nine months of this year.
Eylea, by contrast, is expected by analysts to reach hundreds of millions of dollars in annual sales. Sales of Lucentis in the United States were about $1.5 billion last year, according to Roche, Genentech’s parent company.
It is also leading the race to develop a new class of powerful cholesterol-lowering drugs called PCSK9 inhibitors. And it is developing many drugs in a partnership with Sanofi that brings Regeneron at least $160 million per year.
Dr. Schleifer gives credit to the chief scientist, Dr. George D. Yancopoulos, who has been with Regeneron almost since its founding and before that was an immunology researcher at Columbia University.
“We have a whole pipeline of things that are all his inventions,” Dr. Schleifer said.
He declined to say when he expected Regeneron to become profitable. That could depend to some extent on Eylea’s sales.
Like Lucentis and Avastin, Eylea blocks the action of vascular endothelial growth factor, a protein that causes blood vessels to proliferate and leak fluid into the eye.
The recommended dosing of Eylea, also known as aflibercept, or VEGF Trap-Eye, is once every four weeks for the first three injections, followed by once every eight weeks thereafter.
The label for Lucentis recommends injections once every four weeks, though many doctors inject less frequently.
Many eye doctors have expressed outrage at the price of Lucentis when compared to off-label Avastin. Regeneron executives say they heeded those complaints and did not price Eylea higher than Lucentis, even though they could have because of the more convenient dosing.
“This is very smart and will make Regeneron the ”˜good guy,’ ” Yaron Werber, biotechnology analyst at Citigroup, said in a note Friday. He said that would make Eylea more popular with doctors.
Genentech said that data does not clearly establish that Eylea can be used less frequently than Lucentis. It also accuses Regeneron of patent infringement, which Regeneron denies. A lawsuit on the issue has not yet gone to trial.