The Food and Drug Administration on Monday approved a new anti-AIDS drug, 3TC, developed by Biochem Pharma Inc. of Canada. The treatment will be manufactured and marketed under the brand name Epivir by Glaxo Wellcome PLC.
The new drug was initially approved for use in combination with AZT, the anti-AIDS drug that was approved in 1987 and is also produced by Glaxo Wellcome. While 3TC, like AZT, is in the class of drugs known as reverse transcrip-tase inhibitors, the new drug has less severe side effects.The drugs work by blocking a key enzyme used by the human immunodeficiency virus in its reproductive cycle. A major benefit of 3TC is that it reinstates sensitivity to AZT in patients in whom the virus has become resistant to the treatment. These drugs do not cure AIDS but slow the replication of the virus, enhance immune-system activity and delay the onset of opportunistic infections.
Shares in Biochem Pharma closed at $37 Monday, up $1.25, on NASDAQ. Two weeks ago, the stock hit a 52-week high of $41.125 after an advisory panel to the FDA recommended approval. American depositary receipts for shares of Glaxo, which is based in London, rose 50 cents, to $27.75, on the New York Stock Exchange.
Analysts estimated that Biochem, which is based in Laval, Quebec, would receive royalty payments of 12 percent to 15 percent of sales of 3TC, based on a 1990 licensing agreement with Glaxo.
Analysts also said 3TC could easily attain annual sales of $500 million in the AIDS market alone, surpassing AZT's $300 million. But 3TC is also being tested as a treatment for hepatitis B, which afflicts 300 million people worldwide, representing a multibillion-dollar opportunity should the drug prove effective against that disease.
The rapid approval by the FDA "just emphasizes the strength of the data on the drug and the demand in the AIDS community, which is huge," said Rachel Le-heny, an analyst with Hambrecht & Quist.
"This is the first AIDS drug that isn't absolute torture to take" because of side effects, she said. "If it works as they say it works, it will also increase AZT sales because people won't become as resistant."