Launching Zevalin
Executive Summary
The market success of Zevalin, Idec Pharmaceutical's second product will largely depend on how well the company has built the requisite commercial infrastructure prior to launch. Idec benefited from having watched how Genentech handled the launch of Idec's first drug, Rituxan. But Zevalin raises unique issues including the need to establish a logistical framework for this first-of-its-kind regimen, in which radiation oncologists play a significant role in the therapy. A disappointment would heighten the uncertainty around the launch of other kinds of innovative products--Idec's certainly, and also those of other companies. The industry will be watching this as a barometer of potential for whether other highly complex therapies whose delivery entails the use of several types of specialists can succeed.
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Biogen Idec: A Sign of Biotech's Maturation
As separate companies, Biogen and Idec could not support their products and at the same time leverage the value of the associated large-molecule development infrastructure to create robust pipelines, balance risk, and thus help assure their future growth. By merging, they will be able to exploit their combined capabilities in large-molecule process development and manufacturing, which will give them both the means to reap the full rewards of organic growth and also the capability and capacity to partner with smaller companies in need of their kind of development expertise. While both companies face pipeline risk, Idec's Rituxan appears certain to continue to propel that firm's growth, justifying its higher P/E. Biogen's growth is slower and less certain. Should it further decline, it will be to the detriment of Idec's investors, who will have to wait at least 5-6 years to see the partnering model develop and the pipeline deepen.
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