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Millennium says Velcade could be blockbuster

Shares in US biotech Millennium reach a three-year high after the company reports robust sales for its only marketed product, cancer drug Velcade

Shares in US-based biotech Millennium Pharmaceutical have reached a three-year high after the company reported robust sales for its only marketed product, the cancer drug Velcade (bortezomib).

Millennium estimated that US sales alone would increase 20 per cent in FY07 to reach USD 265m, which beat analyst expectations.

Cowen & Co analysts predicted that US sales of Velcade would probably climb to USD 420m by FY08. They added that international sales could increase from approximately USD 500m in FY07 to USD 921m in FY08.

Millennium currently sells the proteasome inhibitor on the US market only. However, co-marketing partner US-based Johnson & Johnson (J&J) sells Velcade in more than 85 other countries and has provided Millennium with a steady stream of royalties and other payments.

The revised company and analyst sales predictions have caused Millennium's stock to reach a three-year high of USD 15.77 on 28 November 2007, while on 7 December, the stock closed at USD 15.07, or an increase of 51 per cent over the last three months.

Millennium has a stock market value of approximately USD 5bn, while in Q3 FY07; the company reported a USD 1.7m loss on revenue of USD 122.

Millennium is presenting data from 20 trials at the annual American Society of Hematology conference held in Atlanta this week and says it will demonstrate that the drug is effective as a front-line treatment for multiple myeloma. The company is also testing Velcade's effectiveness in treating other types of cancer, such as non-Hodgkin's lymphoma.

Velcade competes with CelGene's Revlimid (lenalidomide), while Proteolix and Nereus Pharmaceuticals are in the early stages of developing next-generation proteasome inhibitors, which could threaten Velcade.

Leerink Swann analysts say that it is unclear how the proteasome market will develop at this point, while Wall Street remains sceptical over Millennium's ability to add new drugs to the pipeline. In November 2007, for example, the company halted the development of a rheumatoid arthritis compound, when it failed in phase II trials.

10th December 2007

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