Bloomberg News

Biogen MS Pill With $3 Billion Potential Hits Study Goals

October 26, 2011

(Updates shares in seventh and eighth paragraphs.)

Oct. 26 (Bloomberg) -- Biogen Idec Inc., the world’s largest maker of multiple sclerosis medicines, gained the most in six months after the experimental MS pill BG-12 was safe and reduced the risk of relapse in a second late-stage trial.

The study evaluated BG-12 and Copaxone, an injected treatment from Teva Pharmaceutical Industries Ltd. It found Biogen’s pill reduced the annual rate of relapse by 44 percent when taken twice daily, and by 51 percent when taken three times a day compared with placebo, meeting the trial goals, the Weston, Massachusetts-based company said today in a statement. Copaxone reduced the rate by 29 percent versus placebo.

Investors had been awaiting the data since Biogen reported positive results in April from an earlier study. The pill may become one of the best options to treat MS, with the potential to garner as much as $3 billion in annual revenue, said Michael Yee, an analyst with RBC Capital Markets in San Francisco.

“These data generally ‘confirm’ BG-12’s efficacy and clearly show that it’s likely a more effective drug than Teva’s Copaxone,” Mark Schoenebaum, an analyst with ISI Group in New York, wrote in a note to clients today. “On a scale of 1-10, with ‘10’ being absolute best case, we would put these data at perhaps 8 or 9.”

Safety Profile

BG-12 also showed a “favorable” safety profile, Biogen said. The study, dubbed Confirm, was done as part of the third and final phase of testing usually required for U.S. approval.

“The most important thing is safety, and the safety profile looks exceptional,” Eric Schmidt, an analyst with Cowen & Co. in New York, said in a telephone interview today. “This will position BG-12 as a front-line drug. It’s hard to imagine this won’t be a blockbuster.”

Biogen gained 9.4 percent to $116.92 at the close in New York, the biggest single-day increase since April 21 and the shares’ highest price in the company’s trading history. Biogen’s stock is up 74 percent this year.

Copaxone is the Israeli drugmaker’s best-selling medicine, accounting for 23 percent of Teva’s second-quarter revenue. Teva fell 1.1 percent in Tel Aviv.

“In the medium- to long-term, the oral drug is expected to replace current MS injectable drugs,” Jonathan Kreizman, an analyst at Clal Finance Brokerage Ltd. in Tel Aviv, said in a telephone interview today. “This is definitely bad news for Teva.”

New Lesions

BG-12 also reduced the number of new lesions compared with placebo more than Copaxone, and showed a greater reduction in the proportion of patients who relapsed. BG-12 lowered the proportion by 34 percent taken twice daily and 45 percent taken three times a day, compared with 29 percent for Copaxone.

The most-common form of MS is relapsing-remitting, characterized by flare-ups followed by periods of recovery. MS affects about 2.1 million people in the world, with about 400,000 patients in the U.S., according to the National Multiple Sclerosis Society. The chronic disease attacks the central nervous system and can cause numbness in limbs, paralysis and vision loss.

“We feel pretty good about the possibility of this becoming a front-line therapy,” Doug Williams, Biogen’s head of research and development, said in a telephone interview today. The company plans to file for regulatory approval in the first half of next year, he said. “Patient convenience is going to be a big driver for some segment of the patient population.”

Biogen’s top-selling MS medicines, Avonex and Tysabri, are given by injection. The drugs generated revenue of $2.52 billion and $900 million, respectively, for the company in 2010.

“This could be well-positioned as a very preferred first- or primarily second-line therapy,” RBC’s Yee said of BG-12 in a telephone interview last week after data from the earlier study were presented. “I think this drug could take up to 20 percent of the market.”

--With assistance from Shoshanna Solomon in Tel Aviv. Editors: Angela Zimm, Bruce Rule

To contact the reporter on this story: Meg Tirrell in New York at mtirrell@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net


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