Immunex Corp.’s decision to build a $500 million manufacturing plant in West Greenwich is a shot in the arm for Rhode Island’s nascent biotechnology industry. But analysts who cover the Seattle company say the move is long overdue.
Immunex earlier this month announced that it will construct the world’s largest cell culture manufacturing plant in West Greenwich, adjacent to an existing facility owned by Wyeth-Ayerst Laboratories. That drug firm is retrofitting the 200,000 square-foot building and will sell it to Immunex after its completion next year.
Both facilities are needed to increase supply of Immunex’ rheumatoid arthritis drug Enbrel, one of the most successful biotech drugs in the industry’s brief history. Eventually the two plants will employ more than 1,000 workers and produce the vast majority of the drug’s global supply, leading to a fivefold increase in Enbrel supplies once the facilities come online.
But the million project, slated to commence in the fourth quarter, won’t be done until 2005, according to the company. The Wyeth plant likely won’t be ready until the second half of next year.
Meanwhile, the list of arthritis patients on the waiting list for the injectable Enbrel drug is growing by the thousands and could hit 80,000 by the time the retrofitted plant starts adding to supplies next year. The bottleneck could cost Immunex more than $200 million in lost sales next year, according to analysts.
“What came too late was the retrofitting of the existing Rhode Island facility,” Morgan Stanley analyst Caroline Copithorne told the Seattle Times in an Aug. 15 story.
While the company scrambles to meet the swelling demand, competitors are catching up.
Patients unable to get Enbrel have gone to a similar drug made by Johnson & Johnson called Remicade. Biotech giant Amgen is expected to receive U.S. Food and Drug Administration approval for a new arthritis drug in coming weeks, and other drug companies are working to bring promising arthritis products to the market.
“If Immunex didn’t have the capacity constraints, they certainly would have been selling more Enbrel,” said Frank DiLorenzo, an analyst at Standard & Poor’s in New York. “That would have kept Remicade from (taking market share).”
There’s no question about Enbrel’s success: Sales hit more than $1 billion during the first 24 months on the market, which is a record for a biotech drug, according to research firm IMS Health.
The company projects Enbrel revenue of $750 million for 2001. By the end of next year, if the existing West Greenwich plant meets its timeline, DiLorenzo predicts Enbrel will be on track for worldwide revenue of $2 billion.
But analysts say the manufacturing-capacity problems thwarted an opportunity to corner the rheumatoid arthritis market. A BusinessWeek magazine article earlier this month chronicled the company’s supply problems with the headline “Immunex: A Lost Opportunity.”
The story uses Immunex as an example of how a biotech firm can become overwhelmed by the success of a blockbuster drug. It quotes Immunex CEO Edward V. Fritzky: “If we could recreate history, we would prepare more aggressively.”
The capacity problems have led to a steep slide in the company’s stock price. It slipped from a high of above 80 in early 2000 to a low of about 11 in April, when Immunex terminated a clinical trial for Enbrel as a therapy for chronic heart failure. The stock price now stands at about 17.
But DiLorenzo says the company’s work in Rhode Island will be key to its future success.
“As long as it goes according to plan and they get the FDA OK for the (Wyeth) plant, that will double capacity next year,” he said. “(Immunex) also is working to improve manufacturing efficiencies, and that will help solve the manufacturing constraint.”
