Cytogen to sever ties with Knoll Pharmaceutical after slow start for MoAb agent in U.S. market

April 20, 1994

Firm also reports drop in European sales of OncoScintNuclear medicine'stepid acceptance of monoclonal-antibody-based imaging agents istaking its toll on MoAb pioneer Cytogen. The Princeton, NJ, companyannounced this month that sales of its

Firm also reports drop in European sales of OncoScint

Nuclear medicine'stepid acceptance of monoclonal-antibody-based imaging agents istaking its toll on MoAb pioneer Cytogen. The Princeton, NJ, companyannounced this month that sales of its first product, OncoScintCR/OV, have not met expectations. As a result, Cytogen will reaquireU.S. marketing rights to OncoScint from partner Knoll Pharmaceutical.The move must be approved by the boards of both companies.

Cytogen received Food and Drug Administration approval earlylast year to market OncoScint CR/OV, making the agent the firstmonoclonal antibody imaging product to be cleared for market inthe U.S. (SCAN 1/27/93). The company set up a co-promotion agreementto market OncoScint with Knoll, the U.S. subsidiary of Knoll AGof Germany.

Cytogen and Knoll faced the daunting prospect of educatingnuclear medicine physicians about a technology that was both unfamiliarand expensive.

Perhaps as a result, sales of OncoScint never got off the groundand were sluggish throughout 1993, with OncoScint generating $1.4million in sales in the U.S. Cytogen underwent a restructuringin September designed to streamline the company and place moreemphasis on developing peptide-based agents (SCAN 10/6/93).

The picture did not improve with the new year. Revenues fromOncoScint in the first quarter of 1994 have been "unacceptablylow," Cytogen president and CEO Thomas J. McKearn said inan April 4 letter to stockholders. Cytogen therefore will reacquireall U.S. rights previously granted to Knoll and will search fora new marketing partner for OncoScint CR/OV. Cytogen is lookingfor a partnership with one or more companies with a commitmentto the field of nuclear oncology, McKearn said.

On the positive side, Cytogen said it has been making progressin its molecular recognition unit (MRU) program, which uses peptidesas targeting agents. Cytogen's peptides are derived either directlyfrom monoclonal antibodies (CDR peptides) or from random peptidelibraries, known as totally synthetic affinity reagents (TSARs).

Cytogen scientists working with researchers at the Universityof North Carolina in Chapel Hill have shown that TSARs not onlycan provide a source for ligands, the biological "keys"on peptides, but for receptors as well, the "locks"on cancer cells to which peptides bind. This allows Cytogen toscreen the TSAR library for receptors and receptor blockers asnew drug candidates, the company said.

Cytogen also reported progress in the development of OncoScintPR, a prostate cancer imaging agent, as well as a monoclonal antibodytherapy agent for bone pain, Samarium EDTMP. Cytogen expects tofile FDA applications for these products in the second half ofthis year.

Cytogen's development of those products could be overshadowedby turbulence in its relationship with CytoRad, a sister companyformed to fund research of Cytogen products.

CytoRad is exploring modifications to its existing businessrelationship with Cytogen and has not yet approved a 1994 budgetfor the development of several of the company's products, accordingto Cytogen. These products include OncoScint PR as well as OncoRadOV and OncoRad PR, cancer therapy products for ovarian and prostatecancer, respectively.

If CytoRad discontinues funding, rights to the products willrevert to Cytogen, which will continue development of the products,according to McKearn.

Nor is Cytogen getting help from Europe, where OncoScint hasbeen on the market since 1992. Cytogen reported European salesfrom OncoScint of $367,000 in 1992; in 1993, European revenuedropped to $164,000.

On a worldwide basis, Cytogen reported revenues of $10.3 millionin 1993, of which $1.6 million was from product sales. Cytogenrecorded revenues of $13.4 million the previous year, of which$367,000 was from product sales.

Expenses rose dramatically last year as Cytogen began marketingactivities for OncoScint. The company reported a loss for theyear of $29.2 million, compared to a loss of $13 million in 1992.

While Cytogen may yet turn OncoScint into a success story,the company's experience so far is an indication of how resistantclinicians have become to expensive technologies, regardless oftheir efficacy.

Although OncoScint has performed as expected clinically, theproduct's price, which adds about $800 to the cost of a nuclearmedicine exam, is a major stumbling block, McKearn acknowledgedin his letter to stockholders.

"The market had become obsessed with cost-containmentissues and incorrectly perceived OncoScint CR/OV as simply anincremental cost versus a cost-effective alternative to surgery,"McKearn said.