Friday April 27 3:09 PM ET<br>Enzon Up After
Setback for Roche Drug <br><br>By Ransdell
Pierson<br><br>NEW YORK (Reuters) - A regulatory setback for a
hepatitis C drug developed by Roche Holding AG (ROCZg.S)
spelled good news on Friday to tiny rival drugmaker Enzon
Inc. (NasdaqNM:ENZN - news), whose shares surged on
the news.<br><br>Swiss drugs group Roche on Friday
said the U.S. Food and Drug Administration had
requested more information about clinical trials of its
experimental treatment, Pegasys.<br><br>That created concern
among investors that Roche's expected U.S. approval for
Pegasys late this year might be delayed, giving
Piscataway, N.J.-based Enzon and partner Schering-Plough
Corp. (NYSE:SGP - news) that much more time to make
inroads with their recently launched new therapy called
Peg-Intron.<br><br>``This is very good news for Schering-Plough and Enzon,
because it could extend their advantage of having the
first product to market,'' said Ivonne Marondel, a
biotech analyst for Gerard Klauer Mattison & Co. who
added that clinical trial results have previously
suggested that Peg-Intron and Pegasys have similar safety
and efficacy.<br><br>``The FDA has asked questions
about Roche's clinical designs and details which were
never asked of Schering-Plough,'' she said, which
suggests Pegasys could suffer regulatory delays as Roche
strives to satisfy the unspecified FDA
concerns.<br><br>Shares of Enzon were up $6.49 or 12.88 percent to $56.87
in afternoon activity on the Nasdaq. It has traded
in the past year in a range between $24.62 and
$84.12.<br><br>Schering-Plough, unlike Enzon, has a wide line of other
prescription drugs. Its shares edged up 11 cents to $38.90 on
the New York Stock Exchange.<br><br>About 4 million
Americans are believed to be infected with the hepatitis C
virus, which quietly attacks and can seriously damage
the liver for decades before symptoms occur. It is
the biggest cause of liver transplants in the United
States and only an estimated 100,000 Americans are now
being treated for the nation's most common serious
blood-borne infection.<br><br>Enzon is best known for its
``pegylation'' technology, in which drugs are linked to the
chemical polyethylene glycol (PEG) in order to make them
last longer in the bloodstream -- thereby reducing the
frequency of needed doses.<br><br>New Jersey-based
Schering-Plough has licensed Enzon's technology to create a
longer-acting ``pegylated'' form of Schering-Plough's
interferon drug, Intron A, that it has recently begun
selling under the name Peg-Intron as a stand-alone
treatment for hepatitis C.<br><br>Enzon is entitled to
receive a 7.5 percent royalty from Schering-Plough on all
Peg-Intron sales, according to some analyst
estimates.<br><br>Injections of Peg-Intron, approved in January by the FDA,
are only needed once a week rather than the
thrice-weekly regimen for Schering-Plough's older
Intron-A.<br><br>One of Schering-Plough's biggest products, Rebetron,
is a combination product for hepatitis C that
combines Intron-A with an antiviral pill called ribavarin.
The combo, considered the current ``gold standard''
of treatment, had estimated global sales over $1
billion in 2000 and Schering-Plough is now awaiting FDA
approval for an improved combination that would pair
Peg-Intron with ribavarin.<br><br>The improved combo
therapy, which lasted longer and was more effective than
Rebetron in clinical trials, could be approved by August
and become the new standard of treatment. It could
generate annual sales of $3 billion within five years, by
some estimates.<br><br>But Roche has been hot on
Schering-Plough's heels, aiming to cash in on the lucrative and
expanding hepatitis C area by selling Pegasys, its
different pegylated form of interferon.<br><br>``Enzon may
really benefit because this is a race for time, and to
the winner go the spoils. This is a huge product area
and whoever gets on the market first will dominate
it, not only in the short term but in the long
term,''