Tuesday, April 01, 2008

Whither Thrombin?

On seeing today’s New York Times article “Seeking Alternative to Animal-Derived Drugs,” my first thought was that it could’a/should’a mentioned the January 2008 approval of the first recombinant human thrombin, which has the potential to replace bovine- and plasma-derived equivalents now on the market. But as noted in stories in IN VIVO and The RPM Report this month, ZymoGenetics, the developer of recombinant thrombin, can’t seem to catch a break these days, especially from Wall Street analysts.


ZymoGenetics saw its recombinant thrombin, Recothrom, the first product it decided to commercialize on its own, as a way to balance the risk in its portfolio. Management has noted that all previous recombinant clotting factors -- along with insulin, hGH and a host of women's health hormones -- had succeeded in clinical trials and in the market. When it initiated the program, “we thought the major risk wouldn’t be clinical trials or commercial, but whether we could manufacture with an appropriate cost of goods,” says CEO Bruce Carter. Bovine thrombin, sold by King Pharmaceuticals, carries a Black Box warning about the severe bleeding risks associated with potential antibody formation. It’s also blocked from the market in Europe because of fears around potential transmission of Mad Cow disease.

But despite the implicit logic that a recombinant product is safer, for various reasons, it’s near impossible to directly correlate bleeding and bovine thrombin, and therefore there's no baseline with which to measure improvement in patient outcome, which poses a problem for reimbursement. As a surgical adjunct, recombinant thrombin also has to make its way through hospitals’ Pharmacy & Therapeutics Committees before it’s stocked, which takes time.

Plus, because Recothrom is a biotech product (and as a biotech company, ZymoGenetics is covered by biotech analysts with little experience following the launch of such a device-like medical product), there appears to be even more uncertainty over how to gauge the product’s trajectory in the market.

It’ll take time to prove the value proposition. Oppenheimer’s Kevin DeGeeter, for example, in a March 31 note, perhaps unfairly used Recothrom’s modest February sales ($26,164) to say that while it’s still very early in the product launch, there are concerns that conversion from bovine-derived thrombin “will take much longer than the Street expects.”

In any event, it is true that ZymoGenetics is in a tough position in a tough biotech stock environment, as it starts to be judged less on the value of its pipeline than on its commercial performance. It'll also be facing a cash crunch later this year and, with hindsight, probably should have financed in 2007 instead of waiting for a potential bump in stock price on the Recothrom approval.

The company likely could have done a better job of prepping analysts for a slow conversion process and launch, instead of believing validation would have come more easily after it found a partner (Bayer) to help with the US launch and open up the European market, and got the drug through FDA with a broad label despite analysts' worries over that.

That said, a tipping point favoring a safer if somewhat more expensive thrombin could come anytime, especially in this politically charged, safety-first health care environment.
Photo from Flickr user foxypar4 used under a creative commons license

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