Renagel sales growth will be driven by results from cardiac calcification and morbidity and mortality trials, Genzyme Chairman Henri Termeer indicated during a Sept. 11 conference call announcing Genzyme's $1 bil. acquisition of GelTex.

Renagel (sevelamer) was developed by GelTex and approved in 1998 for the reduction of serum phosphate in patients with end-stage renal disease. Genzyme and GelTex co-promote the product.

Termeer noted that Renagel was the "driving force" for the merger with GelTex. The merger is another example of a co-promotion deal leading to a merger agreement, such as Pfizer's acquisition of Warner-Lambert to ensure its share of Lipitor revenues.

Genzyme is designing a 2,000-patient trial to study the effects of Renagel on morbidity and mortality and plans to file an IND in early 2001. The study is expected to end in 2004, with final results by 2005.

Genzyme hopes to reproduce the results of a University of Minnesota study that "observed improved trends in mortality among Medicare patients treated with Renagel compared with patients treated with calcium binders," the company said.

The UMinn study found that "hospitalizations were reduced by 50% in this population and this hospitalization reduction was primarily driven by cardiac and vascular events," Genzyme VP-Medical Affairs Nasseem Amin, MD, stated. Mortality was reduced by 33%, "again predominately driven by cardiac events."

The university study also showed annual savings of $17,000 per patient due to reduced hospitalizations.

The company indicated there is increasing concern among physicians about calcium intake and its impact on coronary calcification, and also the impact on morbidity and mortality. In the general population, coronary calcification has been linked with a progression of atherosclerosis and cardiac disease, Genzyme noted.

Encouraged by clinical evidence demonstrating the relationship between elevated calcium intake and cardiovascular disease among dialysis patients, Genzyme is also running a three-year study comparing the product with standard calcium binders.

Genzyme anticipates that annual Renagel sales will reach $500 mil. in five years and $1 bil. in 10 years. The company expects Renagel sales of $45 mil. in 2000, with 2001 sales expected to reach $90 mil.

Next year's Renagel sales represent 9% of the $1 bil. GelTex acquisition.

By contrast to the Genzyme/GelTex agreement, the recent $34.3 bil. purchase of J.P. Morgan by Chase Manhattan provides an interesting commentary on merger valuation, since it would imply that J.P. Morgan is worth only about 34 times GelTex.

Renagel's "momentum" is based on four factors, according to Genyzme: increased use as a first-line treatment, dose adjustments by nephrologists to lower phosphorus levels, growth in the number of dialysis patients and Renagel's potential to offset the total cost of treating these patients.

Genzyme predicts that the number of dialysis patients will grow to 1.7 mil. by 2009, from the current 1 mil.

In addition, the $1,000 annual cost for Renagel therapy is expected to double by 2010 through higher dosage regimens and improved compliance, the company said.

Genzyme "anticipate[s] that physicians will use higher doses to more aggressively manage" serum phosphorous levels, Genzyme Therapeutics President Christi van Heek stated. Total prescriptions for Renagel increased in the second quarter by 18%, she added.

"It is this clinical picture that is developing that makes us quite confident that Renagel is a blockbuster potential product," Termeer stated.

Genzyme expects to use the results of the cardiac calcification trial to demonstrate to physicians that the dosage of Renagel should be increased to lower phosphorous into the normal range.

Heek indicated that the Renagel sales force will be increased to accelerate the reach to physicians with the new clinical data. There are approximately 42 people in the U.S. and 20 in Europe detailing Renagel.

"We will increase the nephrology team in the U.S. by approximately 10, as well as the same in Europe," Heek stated.

The tablet formulation for Renagel was approved in the U.S. July 12 and will launch this month. Heek maintained that the new 800 mg and 400 mg tablets "will allow physicians to more aggressively manage phosphorous into the normal range."

To meet the expected increase in demand for Renagel, Genzyme is expanding its manufacturing facility in Haverhill, U.K. Completion is expected by late 2002.

GelTex shareholders will receive .7272 of a share of Genzyme stock or $47.50 in cash for each of GelTex' 21.4 mil. outstanding shares, subject to proration to maintain the cash portion at 50%. The offer represents a 27% premium over GelTex' Sept. 8 closing price, Genzyme noted.

The deal includes a $31 mil. breakup fee and is expected to close in the fourth quarter.

Genzyme said it will retain GelTex' Waltham, Mass. administrative offices and laboratories. GelTex employs approximately 110 people. GelTex will also bring Genzyme $119 mil. in cash.

Genzyme currently markets the Gaucher disease therapies Ceredase (alglucerase) and Cerezyme (imiglucerase), and the thyroid cancer imaging agent Thyrogen (thyropin alpha).

Through the merger, Genzyme also gains GelTex' bile acid sequestrant Welchol (colesevelam). Sankyo/Parke Davis has U.S. marketing rights for Welchol, formerly Cholestagel. Skaletsky stated that Sankyo held the Welchol launch meeting Sept. 11 and "that product would be available over the next week."

GelTex has a second-generation Welchol product, GT 102-279, in Phase II. Sankyo has the option to license the product (¹ Also see "Sankyo Parke Davis Will Double Sales Force To Market GelTex Cholestagel" - Pink Sheet, 22 November, 1999.).

The other leading product in the GelTex pipeline is GT 160-246 for Clostridium difficile associated colitis. A Phase II trial will be initiated by the end of the year.

GelTex believes that Genzyme will develop GT 160-246 because it "fits well with the strengths of the Genzyme sales force," Skaletsky stated.

Genzyme Sees Renagel Clinical Data Driving Sales After Purchase Of GelTex

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