Healthcare
Biotechnology & Drugs
NASD: SANG
SangStat Medical Corp.
6300 Dumbarton Circle
Fremont, CA 94555
Phone: (510) 789-4300
Mr. Jean Jacques Bienaime
Chairman, President,
Chief Executive Officer and
Chief Operating Officer
Interview conducted by:
Walter Banks, Co-Publisher
CEOCFOinterviews.com
April 2001
Bio of CEO
Jean-Jacques
Bienaimé was elected Chairman in October 2000. Before joining SangStat as President and
COO in 1998 and then CEO in 1999, Mr. Bienaimé was Senior Vice-President of Corporate
Marketing and Business Development at Rhône Poulenc Rorer Inc. (RPR), now Aventis. Since
1992 he held various positions of increasing responsibility within RPR’s US and
International marketing, sales and corporate strategy department, including full P&L
responsibility for a 650 person US organization with revenues of over $400 million.
Previously at Genentech, Mr. Bienaimé was responsible for launching Activase®, one of
the most successful biotechnology drug launches in the United States. Mr. Bienaimé
received his Masters of Business Administration from the Wharton School at the University
of Pennsylvania and a degree in Economics from Ecole Supérieure de Commerce de Paris in
France. He is a member of the board of directors of Aerogen Inc. and of Fox Chase Cancer
Center in Philadelphia.
About
SangStat Medical Corp.
SangStat
is a global biotechnology company building on its foundation in transplantation to
discover, develop and market high value therapeutic products in the transplantation,
immunology and hematology/oncology areas. Since 1988, SangStat has been dedicated to
improving the outcome of organ and bone marrow transplantation through the development and
marketing of products to address all phases of transplantation in the worldwide market.
SangStat’s US headquarters are in Fremont California. SangStat also maintains a
strong European presence, including direct sales and marketing forces in France, Germany,
Italy, Spain, and the U.K., and distributors throughout the rest of the world.
SangStat’s stock is traded on the Nasdaq under the symbol “SANG.” The
company’s web site is located at www.sangstat.com.
Key products:
Thymoglobulin®
[Anti-thymocyte Globulin (Rabbit)]: Thymoglobulin, a drug that
could prevent organ loss for kidney transplant recipients experiencing acute rejection, is
marketed by SangStat in both the US and Europe. Over 40,000 patients in 54 countries have
been treated with Thymoglobulin. While Thymoglobulin is approved in US only for
treatment of acute kidney rejection episodes, clinical trials being conducted to expand
indications, and in Europe it is also marketed for prophylaxis and rejection in kidney,
pancreas and liver transplants, treatment of rejection crisis and acute GVHD in bone
marrow transplant and aplastic anemia
Gengraf™
(cyclosporine capsules, USP [MODIFIED]) (product of Abbott Labs):
Gengraf is marketed for chronic immunosuppression. SangStat
and Abbott signed a multi-year co–promotion, distribution and research agreement in
May 1999. The companies co-promote Gengraf cyclosporine capsules in the United States.
Gengraf was launched May 15, 2000. Gengraf has been granted an AB rating by the FDA and is
bioequivalent to, and interchangeable with, Neoral® capsules (cyclosporine capsules, USP
[MODIFIED], Novartis), the leading cyclosporine capsules.
CEOCFOinterviews -
Mr. Bienaime, could you give us a brief history of SangStat Medical Corp.?
Mr. Bienaime: SangStat was started
about 12 years ago, and it has been a public company since 1993. It has about 280 people world wide, with about
half in the U.S. and half in Europe. Last
year, we reported sales of 81 million dollars, and have had very significant growth in the
past 4 years, from 4 million dollars in 1997 to the 81 million in 2000. SangStat is a
Biopharmaceutical company, which is global, fully integrated and entirely focused on the
field of immunology, immunosuppression. Our main area of activity right now is the use of
immunosuppression in solid organ transplantation and bone marrow transplantation.
CEOCFOinterviews – How long
have you been CEO of SangStat, what are the changes that you’ve implemented since
coming on board, and what effect have they had on the company?
Mr. Bienaime: I joined the company in June of 1998, as President
and Chief Operating Officer. I then became CEO in February of 1999, and Chairman in
October of 2000. Since I became Chairman last October, we have refocused the strategy of
the company. The company was entirely focused
on solid organ transplants, mainly on a product called cyclosporine, which is an
immunosuppressive agent used in most transplant patients. We had significant expectations
for this product, because we had developed a generic form of cyclosporine, which is the
largest immunosuppressive product on the market, a 1.3 billion dollar product. However,
there are now other generics on the market, and consequently the opportunity for us is not
as exciting as was once thought. On the other hand, Thymoglobulin, our leading product has
been very successful, in fact even more successful than anticipated. It is a very profitable product for SangStat with
great potential, so we decided to put our resources behind Thymoglobulin and the other
products that are in our pipeline.
CEOCFOinterviews – Are you currently selling your generic form
of cyclosporine?
Mr. Bienaime: In the U.S., we are selling a product called Gengraf,
which is a cyclosporine capsule, for prevention of rejection for organ transplantation
patients. In the U.S., the cyclosporine market is about 500 million dollars. We are
co-promoting the product with Abbott Pharmaceuticals, which is a large pharmaceutical
company. The product was developed by Abbott,
and we have been selling it with them since May of 2000.
CEOCFOinterviews – Can you give us a revenue breakdown for
each product?
Mr. Bienaime: In terms of breakdown of revenues, this year
we’ve told Wall Street that we anticipate revenues in the U.S. of about 20 million
dollars for Gengraf. That would represent about a 10% market share of the cyclosporine
market in the U.S. with a 50% discount. For
Thymoglobulin we anticipate between 38 and 42 million dollars of revenues in U.S., and for
Thymoglobulin and Lymphoglobuline, outside of the U.S., we anticipate about 22 to 23
million dollars. We pre-announced our first
quarter, and because we have had a very strong first quarter in 2001, we have provided
revised guidance of a better range of a loss per share of 18 to 20 cents, as compare to 22
to 24 cents, which we had communicated earlier. That represents a significant improvement,
mainly due to an increase in the sales of Thymoglobulin in the U.S., which are up 52%,
versus the first quarter of last year, in 2000, and our sales outside of the U.S. are also
up 43%.
CEOCFOinterviews – What is your market share for
Thymoglobulin?
Mr. Bienaime: For Thymoglobulin, we already have about a 35% market
share in the U.S., in dollars, and between 50 and 65 % in Europe.
CEOCFOinterviews – What percentage of the market share for
Thymoglobulin do you anticipate capturing?
Mr. Bienaime: Thymoglobulin was launched in the U.S. in February of
1999, and we have steadily been growing its market share.
It is now the number one product in the immunosuppressive antibody market in the
U.S. and in Europe. We anticipate growing our U.S. market share to probably 50 or 55%,
over the next 2 or 3 years.
CEOCFOinterviews – What do you need to do to accomplish that?
Mr. Bienaime: We need to continue aggressively promoting the
product to transplant surgeons and physicians, and we are also supporting the product with
new clinical studies. First, in the field of solid organ transplantation we are
implementing a comparative study to Simulect, which is a monoclonal antibody that is
approved in induction therapy. When the patient has just had a transplant, such as a
kidney, they are given 5 to 10 days of an intravenous antibody, such as Thymoglobulin to
prevent early rejection in the first 12 months after surgery. That is called induction
therapy. Thymoglobulin is not currently approved for this indication, so we are doing a
comparative trial in 240 patients vs Simulect. Our hope is to demonstrate that our product
is superior to other agents. The trial is already half enrolled with over 120 patients, we
should be done with the enrollment by the end of this year and hope to communicate the
results in May of 2002, at the American Society of Transplantation meeting.
CEOCFOinterviews – What is the real potential for
Thymoglobulin?
Mr. Bienaime: Thymoglobulin has very
significant potential because just in solid organ transplantation the whole market is
about 100 million dollars. We have plans to grow the business beyond solid organ
transplantation into new hematology/oncology indications, such as aplastic anemia,
myelodysplastic syndrome and bone marrow transplantation. We have just started a trial in
myelodysplastic syndrome (MDS), which is also called pre-leukemia, and we have received
orphan drug status from the FDA last September in that indication, because there is
currently no approved therapy. We hope to have completed the enrollment by the end of this
year, 2001, and file for approval for that indication by the end of 2002. If you look at
all of the hematology indications that we could go after, between aplastic anemia,
myelodysplastic syndrome and bone marrow transplant, it is about a 250 million dollar
market opportunity, and if we only get 20% of that market it would translate into another
50 million dollars, and would have doubled the sales of Thymoglobulin.
CEOCFOinterviews – How do you bring your products to the
market?
Mr. Bienaime: We bring our products to the market in a combination
of ways. We have a direct sales organization in both the U.S. and Europe, with 35 sales
and marketing people in the U.S. and about the same in Europe, selling Thymoglobulin and
Lymphoglobuline. Therefore, we are able to successfully sell complex clinical products to
tertiary care hospital centers, which is where transplantation is generally done. This is
a particular strength for SangStat because a company our size usually doesn’t have
sales and marketing operations in both the U.S. and Europe. We are also selling Gengraf
through our co-promotion rights, which we acquired from Abbott. We also recently acquired
the world wide marketing rights for a product called ABX-CBL from a company called
Abgenix, which is our neighbor here in Fremont, California. ABX-CBL is a monoclonal
antibody that is being developed for the treatment of what is referred to as
‘graft-versus-host’ disease in bone marrow transplant patients, and it is very
complimentary to Thymoglobulin. Some of our product pipeline is home grown and some have
come to us through acquisitions. It all depends on the opportunities.
CEOCFOinterviews – What is your current product pipeline?
Mr. Bienaime: The pipeline includes new indications for
Thymoglobulin, and the cyclosporine capsule, which we are developing for Europe; this will
be a different capsule from the one which we are selling in the United States. Our ABX-CBL
is in Phase II/III, in graft-versus-host disease in the U.S., and could be on the market
in 2004. We are also in late stage pre-clinical and should enter the clinic in May of this
year, 2001, with a product called RDP58, which is a TNF (tumor necrosis factor) alpha
inhibitor that we are developing for inflammatory bowel disease, which includes both
ulcerative colitis and Crohn’s disease and affects about 1 million patients in the
world. Today the only approved therapy for
Crohn’s disease is a product called Remicade, which is an antibody by
Centocor/Johnson & Johnson, and the cost of therapy with this antibody is about 10
thousand dollars per year. Therefore, this is a very large market opportunity for us. What
is exciting about it is that we may have an orally active agent, and Remicade is
intravenous. We have filed a CTX (the UK equivalent of the FDA IND) in the U.K in March
this year, 2001. We hope to be able to start human trials in May.
CEOCFOinterviews – What are your final thoughts to your
current shareholders and interested investors?
Mr. Bienaime: What I would like to add is that we will have a loss
per share in the high teens in the first quarter of this year, so we are improving our
financial situation every quarter, and we are comfortable with breaking even in the 4th
quarter of this year, 2001, in about six to nine months. We feel that this should have a
significant impact on our stock. This is the second quarter where we are delivering
results that are better than Wall Street anticipates, and we are making very significant
progress and growing the revenues of this company.
