But Crohn's treatment shows promise for MS
July 25, 2003
By Naomi Aoki, Globe Staff
Biogen Inc. and Elan Corp. said yesterday their drug Antegren failed in a major clinical trial to significantly reduce the symptoms of patients with a gastrointestinal disorder known as Crohn's disease.
The setback delays, if not derails, the development of the drug for the disorder, which affects about a million people worldwide and causes frequent bouts of diarrhea and abdominal pain.
Shares of both companies dropped yesterday on the news. Biogen shares fell $2.48 to $38.70 on the Nasdaq Stock Market. American depositary receipts for Dublin-based Elan tumbled $1.99 to $4.47.
But Wall Street analysts said the drug still has the potential to become a blockbuster, meaning it would generate at least a billion dollars in sales a year, even if it is never approved to treat Crohn's disease.
The drug is also in testing for multiple sclerosis, a disease that slowly robs people of their muscle control and cognitive ability, causing dizziness, fatigue, and loss of balance. If Antegren lives up to the promise seen in early clinical trials, it could offer a safer and more effective alternative to current therapies, climbing to the top spot in the $2.9 billion worldwide market for multiple sclerosis drugs.
''The big kahuna for Antegren is multiple sclerosis,'' said Jennifer Chao, an analyst with RBC Capital Markets in New York. ''That is the multibillion-dollar opportunity, and it has very strong potential there. Crohn's, by comparison, is small.''
Cambridge-based Biogen, one of the state's largest biotechnology firms, and Elan had planned to file an application with the US Food and Drug Administration by year's end to market Antegren for Crohn's disease. Given the disappointing trial results, however, the companies have scrapped that plan. They said yesterday they will review their options with the FDA.
Although the results failed to meet the study's main goal, which is usually a death knell for a drug, the companies said the data showed signs the drug was effective against Crohn's, especially in a large subset of patients whose blood tests showed signs of more active disease. Study patients given a placebo, or a dummy drug, also showed a greater-than-expected benefit -- a phenomenon known as the placebo effect that the companies said may have masked the drug's actual effect.
The FDA could require another trial if the companies plan to seek approval. Albeit less likely, the agency could also agree to consider a re-analysis of the existing data combined with additional data being generated from a second clinical trial that is underway. Patients whose symptoms improved during the completed trial are now being studied in a yearlong clinical trial to determine whether the drug can keep the disease in remission. Those results are expected next year.
''It doesn't seem likely that you'd get approval for a drug that works in maintaining remission when you haven't shown the drug is effective in inducing remission,'' said Eric Schmidt, an analyst with SG Cowen in New York. ''The regulatory path for Antegren in Crohn's is murky at best right now.''
Though disappointing clinical trial results are always a blow to a company's stock, Schmidt said, Biogen's fundamentals remain strong. The company yesterday released its earnings report for the second quarter, its first financial update since last month when it said it plans to merge with fellow biotech company IDEC Pharmaceuticals Inc. later this year.
While the earnings report focused largely on Biogen's financial performance this quarter, the company's chief financial officer, Peter Kellogg, said investors could expect the merged company to increase its revenues by 15 percent a year and its profits by 20 percent a year while spending more on researching and developing drugs.
Biogen's revenue was $326 million for the three-month period ending June 30, up 21 percent from the same period last year. The increase was driven largely by the company's top-selling multiple sclerosis drug Avonex, which accounts for nearly 90 percent of the company's revenue.
Investors expected sales of the drug to slip dramatically after rival Serono SA and Pfizer Inc.'s drug Rebif was approved by the FDA last year. Instead, Avonex surprised Wall Street analysts by generating sales of $286 million this quarter -- up 14 percent from the previous period a year ago.
Biogen lowered its expectations for its second marketed product, however.
Amevive, which was approved early this year to treat a chronic skin condition
known as psoriasis, posted $7 million in sales this quarter. Although Biogen
said sales are steadily increasing, insurers have been slow to reimburse
for the drug, which costs $7,000 to $10,000 for a three-month dose. The
company, which had initially predicted sales of $85 million this year,
is now forecasting sales of $50 million to $70 million.
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