LOS ANGELES (Dow Jones)--Cruttenden Roth Inc. analyst Wole Fayemi initiated coverage of two companies that have developed competing drugs to treat lymphoma, or white-blood-cell cancer, using monoclonal antibodies.
Fayemi started IDEC Pharmaceuticals Corp. (IDPH) with a buy rating and Coulter Pharmaceutical Inc. (CLTR) at neutral.
In a research note, Fayemi said market conditions favor IDEC. Its Rituxin, launched in January, has about an 18-month lead to market over Coulter's Bexxar, Fayemi said. A second IDEC product that will be used with Rituxin, IDEC-Y2B8, is expected to hit the market shortly after Bexxar, leaving Bexxar only a small window of opportunity to establish itself in the marketplace, in Fayemi's opinion.
Rituxin also has the capacity to be incorporated into standard chemotherapies, while Coulter's Bexxar "will have to fight to establish itself in the market against standard regimens," Fayemi said. Bexxar, currently in phase III trials, contains a radioactive iodine molecule that can't be used in combination with standard chemotherapy treatment because of its toxicity.
Therefore, Bexxar must show itself to be a superior alternative to chemotherapy in order to convince doctors and the Food and Drug Administration of its value, Fayemi said. Given this requirement, Fayemi said he's "not too impressed" with interim results of the trials released by Coulter on Tuesday - even though investors bid the stock up on the news.
Of the 22 patients in the trial who provided adequate data for analysis, 10 showed longer duration of response on Bexxar while three showed longer duration of response on chemotherapy. In the other nine patients, the duration was equivalent.
"With the data being marginal, at best, (Coulter's) stock at the current price is way too risky," Fayemi said.
Coulter closed Wednesday at 34, down 1/8, on Nasdaq, while IDEC rose 1 1/8 to 36.
- By Anthony Palazzo; 714-739-5538; firstname.lastname@example.org