Right now, the company can't meet patients' demand for Enbrel, but management is doing its best to resolve the problem, projecting that it will be able to meet demand by mid-2002. Immunex expects to have a new manufacturing facility in Rhode Island up and ready for Food and Drug Administration approval at the end of the year, and another manufacturing facility in Ireland is expected to be ready by 2005.

Enbrel's sales were weaker than Wall Street expected in the first quarter, and management attributed that to the implementation of a registration program to manage the current Enbrel supply issue. In early April, Immunex reported that approximately 2,500 new patients were being offered "active" status in the Enbrel Enrollment Program. Patients are offered active status when they have completed their application and supply is available. That's a good move on Immunex's part, as long as Enbrel continues to add patients to its pool. In return, it will help maintain Immunex's market presence and dominance. Besides, other biotech companies that are developing rheumatoid arthritis treatments are several years away from commercialization, provided they get past clinical trials and FDA approval.

New Applications

On another note, the company announced encouraging preliminary results from its phase III study of Enbrel in psoriatic arthritis patients. Psoriatic arthritis, a form of joint disease that is similar to rheumatoid arthritis, occurs in about 10% to 20% of patients with psoriasis. The latest study's results demonstrated that patients treated with Enbrel experienced significant improvement in signs and symptoms of their disease compared to a placebo. Immunex has stated that it plans to file a supplemental biological license application for psoriatic arthritis with the FDA in mid-2001, with approval anticipated in early 2002. About 250,000 patients in the U.S. are affected by psoriatic arthritis, which represents $500 million in additional annual sales for Enbrel. Add in the $2 billion of estimated revenue for rheumatoid arthritis treatment, and Enbrel has a potential market of approximately $2.5 billion annually.

Even with approval and filing, substantial sales in psoriatic arthritis won't happen until 2003, when more Enbrel is available and the supply crisis is over. But timing could be in Immunex's favor, especially if Enbrel can get fast-tracked by the FDA and approved by the time the Rhode Island manufacturing plant comes on line in 2002.

Immunex's current products will continue to make money for the company. On the other hand, its drug pipeline is in the early stage of development and won't come into play in the near future. But with about $1.6 billion in the piggy bank, the company will fuel growth in other ways, such as its Helix project, Immunex's new state-of-the-art research and technology center in Seattle.