August 3, 2000
By Erik C. Dellith
Market Guide, a subsidiary of Multex
Multiple Sclerosis is a serious, degenerative disorder of the nervous system, with no known cause or cure. However, many biotech firms are developing better ways to treat this perplexing disease.
The Biotech Corner articles over the last couple of months have addressed biotech companies by the type of disease that each researches. This week, I am going to discuss those firms that are developing new treatments for Multiple Sclerosis (MS).
MS is a serious, degenerative disorder of the nervous system. It is reportedly the most common chronic neurological disorder afflicting young adults in North America and Europe, striking an estimated 300,000 people in the US alone. Furthermore, there are about 10,000 new cases in the US each year.
MS results in the destruction of the myelin sheath, which is an insulating layer of cells that wrap around neurons and essentially enhances the flow of information across the nerve. This destruction results in scarring and accumulation of plaques, or lesions, of demyelination in nerve fibers, and interrupts the transmission of nerve impulses. As such, common symptoms of MS include weakness, numbness, vision problems, slurred speech, poor coordination, and, in severe cases, partial or complete paralysis.
Facing The Unknown
Understanding the cause of a disease/disorder is a key factor in developing treatments and cures. Unfortunately, no one has been able to pinpoint the exact cause of MS, though there are several different ideas being tossed around.
The National Multiple Sclerosis Society (NMSS) discusses four key areas being explored: immunologic, environmental, viral, and genetic.
The NMSS explains that MS involves an abnormal autoimmune process, where the body's immune system essentially attacks the nervous system. While the attacking cells have been identified, the reason for stimulation of these cells is not yet fully understood. Furthermore, the target receptor sites have not been located. The point to understand here is basically that, aside from the immune cells that do the damage, little else is known about this autoimmune response.
There is also evidence from various studies, looking at migration patterns and socioeconomic factors, to support the view that there are environmental factors at play here. Meanwhile, the viral point of view is also being explored. There are many viruses that cause demyelination and inflammation, so it is possible that a similar virus initiates, or at least plays a role in, MS. Finally, the genetic perspective is being considered. Although MS is not a hereditary disease, a person's risk level for developing MS is remarkably higher if a member of their immediate family has the disorder, indicating that there might be some genetic predisposition or susceptibility to this disorder.
It should also be noted that MS strikes different people in different ways, and that patients respond differently to the treatments. Furthermore, as noted in a recent NMSS press release, an international team of researchers has identified four different categories of MS, depending on the type of brain lesion and area of demyelination. Based on this information, it is not surprising to see that MS might actually be a group of similar diseases, but with different causes, and therefore, patients will need different treatments best suited to their type of MS.
Current Treatments and New Hopes
There is no cure for MS, but there are some treatments currently available. Certain corticosteroids, like methylprednisolone, prednisone, and dexamethazone, among others, are often used to relieve inflammation. These are useful in treating MS because they can reduce the inflammation in the central nervous system, and also because they can ameliorate the blood-brain barrier, which gets damaged.
Another currently available treatment is Interferon beta 1a, a protein involved in the body's immune response. One of the largest biotech companies, Biogen (BGEN) markets interferon beta 1a as Avonex. Avonex is BGEN's lead product, and is on the market in more than 65 countries and is used by more than 90,000 patients for treating relapsing forms of MS. BGEN is looking to expand the indication of Avonex to include other stages of MS.
Immunex (IMNX) is another one of the larger biotech companies that is looking at treating MS. The company has three key products: ENBREL for treating Rheumatoid Arthritis; LEUKINE, for stimulating two types of white blood cells; and NOVANTRONE, a chemotherapeutic agent. The company is now looking to expand uses for NOVANTRONE to include multiple forms of MS. The FDA has already filed an "approvable letter," outlining its support to use NOVANTRONE for MS. IMNX expects to hear more from the FDA regarding possible approval of NOVANTRONE for treating MS later this year.
Even though two of the largest biotech companies (BGEN and IMNX, with market caps of $8.1 billion and $23.4 billion, respectively) are doing research in this segment of the biotech industry, there are also several smaller companies that are reporting promising results.
One company that has a rather positive outlook, but is considerably smaller than BGEN and IMNX is Alexion Pharmaceuticals (ALXN), which has a market cap of about $935 million and relatively attractive product pipeline. ALXN is making good advances in a variety of different areas, not just MS. The company is doing research into cardiovascular care, as well as various autoimmune disorders. Its lead investigational drugs are currently in clinical trials for cardiopulmonary bypass, myocardial infarction, rheumatoid arthritis, and nephritis. But that is not all; ALXN is also investigating other autoimmune diseases, like lupus, psoriasis, and MS.
ALXN has performed like the typical biotech-oriented stock this year, peaking in early March, losing substantial ground until early May, then rebounding only to stabilize in a tight trading range in recent weeks. However, given the company's extensive pipeline and recent research advances, ALXN currently appears well positioned for future growth.
The Immune Response Corp (IMNR) is another relatively small company that is making good research advances. I mentioned IMNR in the 7/27/00 Biotech Corner, in which I discussed companies doing HIV/AIDS research.
IMNR has a market cap of about $230 million. The company's lead product is REMUNE, for treating HIV, and it has teamed up the Agouron Pharmaceuticals, a division of pharmaceutical giant Warner-Lambert. As I mentioned in that article, unlike many anti-viral therapies that try to prevent the virus from replicating, REMUNE is believed to stimulate the immune system. Studies have demonstrated that REMUNE, when used in combination with anti-viral drug therapy, stimulates cytotoxic T lymphocytes (CTLs, or killer T-cells), which are the white blood cells that, according to IMNR, are capable of killing HIV-infected cells. IMNR is also doing research into various autoimmune disorders, and has investigational products in clinical trials for treating such afflictions as rheumatoid arthritis and psoriasis, in addition to MS.
IMNR's stock has followed the basic biotech pattern this year, peaking in early March, losing considerable ground through early May, and then rebounding nicely just to hold relatively steady in recent weeks. The outlook for IMNR is also positive, based on its pipeline, current stock price, and research partners.
Getting even smaller, we notice Cambridge NeuroScience (CNSI). This company has a market cap of about $28 million, and its stock, like that of many other biotechs, reached a 52-week high in early March, promptly lost much of its value, and has traded in a very tight range since early April.
This development-stage company is doing research in the areas of nervous-system disorders and pain management. It is developing ion-channel blockers and protein growth factors for treating disorders from neuropathic pain to MS.
Earlier this year, CNSI entered a definitive merger agreement to merge with UK-based CeNeS Pharmaceuticals. This appears to be a key strategic move for both firms, and, if completed, should result in certain research synergies and an enhanced product pipeline, which includes several items in late-stage clinical trials. The transaction, if approved, is expected to be completed later this quarter. If completed, CNSI will be absorbed into CeNeS, which will continue to trade on the London Stock Exchange.
MS is a devastating disease that is afflicting more people each year. Scientists have yet to find the exact cause, though various theories are floating around. While there is no cure, many biotech companies are developing novel, new products to treat this disorder.
The biotech companies
I mentioned above are examples of the types of opportunities that investors
have in this segment of the industry, from the well-established, mature
firms like BGEN and IMNX, to the really small, development-stage firms,
like CNSI. Regardless of which avenue investors like to take, one thing
is definite, there is strong demand for more effective treatments and,
most definitely, for a cure.