NeoRx mulls Verluma’s future as Du Pont gives up product rights

Lung cancer agent has produced ‘insignificant’ revenues

NeoRx is debating the future of its Verluma radiopharmaceutical because of slow sales of the lung cancer imaging product and the decision by marketing partner Du Pont to relinquish licensing rights to the agent. While the Seattle company would like to find a new partner for Verluma, NeoRx executives admit that doing so is not an immediate goal.

Verluma was approved by the Food and Drug Administration in 1996, along with several other monoclonal antibody-based radiopharmaceuticals, including Cytogen’s ProstaScint, CEA-Scan from Immunomedics, and Myoscint from Centocor (SCAN 9/25/96). The products were launched amid concerns over whether the high price and small range of applications of the agents would limit their commercial success.

Those concerns appear to have been well-founded. All of the products have recorded slow sales over the past two years, and in several cases marketing rights have changed hands as larger radiopharmaceutical firms give up licensing rights.

In the case of Verluma, NeoRx’s marketing partner, Du Pont Pharmaceuticals of North Billerica, MA, informed NeoRx in May that it would terminate their licensing deal, effective May 1999. NeoRx reported that Verluma royalties from the deal were “insignificant” in 1997 and 1998. On the bright side, NeoRx said that the termination of the deal was not likely to have a major impact on the company’s revenues.

Although NeoRx would like to find a new partner for Verluma, little effort is being expended in doing so, due to the product’s sluggish performance, according to Richard Anderson, CFO of NeoRx.

“We will be exploring a number of opportunities for Verluma, one of which is to seek a new partner,” Anderson said. “But to be honest, it is not at the top of our priority list.”

NeoRx has been putting much of its energy into Avicidin, a cancer therapy agent that had been licensed to Janssen Pharmaceutica, a subsidiary of Johnson & Johnson. In September, however, Janssen announced that it, too, had decided to terminate the licensing deal.

NeoRx this month reported third-quarter financial results that indicate the impact that the lack of a commercially viable product has had on the company. The firm recorded revenues of $149,000 for the period (end-September), compared with $5 million in the same period a year ago, when NeoRx received a $5 million licensing payment from Janssen. NeoRx’s net loss was $3.1 million for the most recent period, compared with net income of $1.4 million in the third quarter of 1997.

NeoRx president and CEO Dr. Paul Abrams said that, given recent events, the company plans to focus its energy on its most promising clinical projects, such as skeletal targeted radiotherapy for the treatment of multiple myeloma, and a pretarget lymphoma product for treating B-cell lymphoma. NeoRx has $32.6 million in cash and short-term investments, which should last the company about two years at its current spending rate, Abrams said.