Hospira to test generic anemia drug

Jul 29, 2010 — Chicago Tribune

Bruce Japsen

Jul. 29, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- In the wake of health reform's passage into law, Hospira Inc. (NYSE:HSP) will begin testing a cheaper version of a popular anemia biotech treatment in the first phase of a U.S. clinical trial.

Lake Forest-based Hospira said it will begin the first phase of trials for a "biosimilar," or a biogeneric, version of brand-name Epogen in patients with renal dysfunction who have anemia. Hospira's version is called Retacrit in Europe, where patients can get biosimilar drugs that are 20 to 30 percent cheaper than brand names. Hospira would not disclose a price for Retacrit.

The new health reform law clears a path for the U.S. Food and Drug Administration to approve biosimilar versions of brand-name biotech drugs. Biotech drugs in biosimilar forms are unavailable in the U.S. because they were not part of the 1984 landmark Hatch-Waxman law that allowed for cheaper generics. That law largely covers products derived from chemicals.

Because biotech drugs are derived from living cells and, therefore, are more complex to make, the new law is requiring lengthy clinical trials before they are approved in less expensive biosimilar form.

The FDA has not established guidance to drugmakers on how the approval process will work, given the law was enacted just four months ago. But the agency is allowing Hospira to begin clinical trials. Hospira said it will test Retacrit against Epogen, which is sold by biotech giant Amgen Inc. (NASDAQ:AMGN) of California.

Hospira's trial of its biosimilar version of Epogen will take place at 20 U.S. hemodialysis centers. Pending success of the first phase, the trial will be expanded next year, Hospira said. The company would not speculate on possible approval of its biosimilar drug.

The company, however, said it will be the first of many biosimilar versions of brand-name biotech drugs.

"This trial marks a key milestone for Hospira's biosimilars program," said Dr. Sumant Ramachandra, Hospira's chief scientific officer. "We hope to leverage our leadership in generics and our biosimilars experience in Europe to make affordable, safe and effective biosimilars available to U.S. patients and their health care providers once patents expire over the next several years."

During the health reform debate of the last year, supporters of biosimilar versions of brand-name biotech drugs say their eventual introduction could bring savings of $10 billion a year in the U.S.

Regulatory issues overshadow profits: Separately, Hospira's second-quarter profits more than tripled compared with the year-ago period, when the company had charges related to its global cost-cutting initiative.

But sales were largely flat as the company continues to deal with regulatory issues that contributed to a major sell-off on Tuesday of the company's stock. On Wednesday, Hospira fell 7 percent, or $4.09 a share, to $52.72 on the New York Stock Exchange.

Hospira had net income of $83.5 million, or 49 cents a share, in the period ended June 30. That compares with $25.5 million, or 16 cents a share, in the second quarter of 2009, when the company had reported charges related to its cost-cutting initiative, dubbed Project Fuel, that is saving the company more than $100 million annually and has cut several hundred jobs.

Revenues in the quarter were up 1.2 percent, to $968.2 million. Hospira said sales of specialty injectable drugs helped offset declining revenue from its medication delivery business, which has been dogged by the loss of sales from its Symbiq infusion pump, a product the company stopped selling because of a flawed alarm system.

In addition, the company has been unable to sell more lucrative products such as the popular anesthesia drug Propofol because of an FDA inquiry into quality control issues at two plants in North Carolina.

Chief Executive Christopher Begley said Hospira has been meeting with regulators from the FDA but could not predict when the drugs or infusion pump would return to the market.

bjapsen@tribune.com

Newstex ID: KRTB-0197-47419223